Foreclosure starts drop to lowest level since 2005

The number of U.S. properties subject to foreclosure filings — notices of default, scheduled auctions, or bank repossessions — fell on an annual basis for the 35th straight month in August, to 128,560, according to a report released today from foreclosure data aggregator RealtyTrac.

That’s a 34 percent year-over-year decrease, driven largely by a 44 percent drop in foreclosure starts, which fell to 55,775 — their lowest level since December 2005.

Bank repossessions (also known as real estate owned properties, or REOs) fell 25 percent from a year ago, though they reached a five-month high in August, rising 6 percent from July. Judicial foreclosure states, which typically take longer to process foreclosures, seem to be clearing some of their backlogs.

New York’s REO activity rose 123 percent year over year to a 34-month high. In New Jersey, repossessions increased 63 percent to a 31-month high, and in Florida, REO activity went up 48 percent to a seven-month high.

Nevada had the highest foreclosure rate in the nation last month, followed by Florida, Ohio, Maryland and Delaware.

“The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year,” said Daren Blomquist, vice president at RealtyTrac, in a statement.

“Meanwhile, foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August.”

Source: RealtyTrac