Foreclosure filings rose across the U.S. in August on a monthly basis, as lenders pushed out distressed properties that have been on hold for the past year, according to foreclosure data company RealtyTrac.
There were 19,508 foreclosure filings – which include default notices, auctions and bank repossessions – an increase of 0.8 percent from July, but still down 15 percent from August 2011.
After the robo-signing settlement, foreclosures now seem to be increasingly concentrated in “judicial states,” those where foreclosures must be reviewed by a judge, instead of solely in the former real estate hotspots like Nevada, Arizona and California.
“Bucking the national trend, deferred foreclosure activity boiled over in several states in August,” said Daren Blomquist, vice president of RealtyTrac in a press release. He added, “Many of these states last year had artificially low foreclosure numbers and now the lenders are finally catching up with some of the delayed foreclosures.”
RealtyTrac found that 20 states had yearly increases in foreclosure activity, with judicial states filling the bulk of the list. In Illinois, foreclosures were up 42 percent compared with the previous year, with one out of every 298 properties in the state receiving a foreclosure notice, now the highest foreclosure rate in the country. Other judicial states that saw major increases included New Jersey with a 65 percent year-over-year jump, New York with 56 percent, Maryland with 46 percent and Pennsylvania with 41 percent.
However, on a national basis foreclosure starts dropped 13 percent compared with a year ago and bank reposessions declined 19 percent, a product of lenders’ greater willingness to approve short sales and mortgage modifications for troubled homeowners.
“The increase in short sales of properties that have not even started the foreclosure process indicates that lenders are moving further upstream to deal with their distressed inventory, thereby avoiding the increasingly complex and lengthy foreclosure process altogether,” Blomquist said.
And fewer foreclosures is one of the first steps to getting the housing market back on to solid ground.