Default notices sent to U.S. households jumped 33 percent in August from the previous month, according to data from foreclosure data company RealtyTrac, a sign that banks are finally starting to get the foreclosure wheels turning again.
78,880 homes received a default notice for the first time last month, which was a nine-month high and the highest monthly increase in four years. Default notifications have risen particularly high since last fall in states where the ‘robo-signing’ documentation scandal held up foreclosure proceedings. In California, filings jumped 55 percent since July, and in New Jersey, filings increased by 42 percent.
In terms of total foreclosure filings, 228, 098 were sent out nationwide in August, up 7 percent from July but down 33 percent from the previous year.
Default notices fell 18 percent from August 2010, but that does not necessarily mean the market is progressing; more likely this is a signal that banks have not yet gotten through their backlog of foreclosures from the last few months.
“There are probably about 3.5 million loans that should be in foreclosure but aren’t yet, and we’re going to have to work through that inventory before the housing market can come back,” said Rick Sharga, senior vice president at RealtyTrac as quoted in a Reuters article. “This is a painful but necessary first step to get the housing market back on a more even keel.”
At the top of the list sits Nevada with one out of every 118 homes receiving a foreclosure notice. Nevada has led the nation in per capita foreclosures for the last four straight years. The second and third spots went to California with one out of every 226, and Arizona with one out of every 248 households receiving a notice.