The number of properties subjected to foreclosure-related filings increased 5 percent from the second quarter to the third, driven by a 21 percent increase in bank repossessions, data aggregator RealtyTrac said today.
RealtyTrac said the number of properties hit with foreclosure-related filings dropped 4 percent from August to September, to 343,638, but that number still represented a 29 percent increase from a year ago, and the third-highest monthly total since the downturn began.
The 937,840 homes subjected to foreclosure-related filings during the third quarter represented a 23 percent increase from a year ago. One in 136 U.S. homes was subjected to a filing, the highest rate in records dating back to the first quarter of 2005.
Not all homeowners who enter the foreclosure process end up losing their homes, as some are able to refinance their loans or negotiate a loan modification or other workout with lenders.
The Obama administration last week reported that loan servicers had entered into 487,081 trial loan modifications with troubled borrowers through the end of September under the Home Affordable Modification Program (HAMP) — a 27 percent increase from August’s totals.
A report issued last week by a Congressional Oversight Panel questioned whether HAMP, which launched in May, can cope with rising unemployment and foreclosures on prime loans. As many as 10 million to 12 million foreclosure starts lie ahead if unemployment remains elevated, but the HAMP program was designed to help 4 million borrowers at most (see story). …CONTINUED
RealtyTrac follows properties through three phases of foreclosure, which begins when lenders file a notice of default or lis pendens against a delinquent borrower. The second step is a notice of foreclosure sale, before properties are either sold at auction or repossessed by banks to become real estate owned, or REO.
Of the nearly 1 million homes subjected to foreclosure-related filings in the third quarter, nearly one in four were being moved onto banks’ books as REO inventory — a total of 237,052 homes.
The 21 percent increase in bank repossessions from the second quarter to the third corresponded to increased defaults and scheduled auctions in the previous two quarters, said James Saccacio, chief executive officer of RealtyTrac.
REO activity increased from the previous quarter in all but two states and the District of Columbia, Saccacio said — an indication that lenders may be working through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.
The 10 states with the highest foreclosure rates were Nevada, where one in 23 homes was subjected to a foreclosure related filing; Arizona (one in 53 homes); California (one in 53 homes); Florida (one in 56); Idaho (one in 97); Utah (one in 97); Georgia (one in 119); Michigan (one in 122); Colorado (one in 131); and Illinois (one in 141).
In terms of raw numbers, California accounted for nearly 27 percent of the nation’s total foreclosure-related filings (250,054), followed by Florida (156,924), Arizona (50,342), Nevada 47,952), Illinois (37,270) and Michigan (37,026). Those six states accounted for 62 percent of all U.S. foreclosure-related filings.
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