Nearly one million homes received some form of foreclosure notice during the third quarter, setting an all-time high for foreclosure filings reported by RealtyTrac. Foreclosure notices, which include default notices, bank repossessions or auction sale notices, rose five percent above the second quarter of the year and nearly 23 percent higher than a year ago. One in every 136 US homes received a foreclosure filing during the quarter.
"Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters," said James J. Saccacio, chief executive officer of RealtyTrac. "REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties."
Six states accounted for more than 60 percent of nation's third quarter total.
California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62 percent of the nation's total foreclosure activity in the third quarter, with 579,541 properties receiving foreclosure filings in the six states combined.
Nevada, Arizona, California led the nation in foreclosures. Nevada had the highest state foreclosure rate in the third quarter, with one in every 23 homes receiving a foreclosure filing — nearly six times the national average.. Nevada REO activity in the third quarter increased 29 percent from the previous quarter and scheduled auctions increased 26 percent from the previous quarter, but defaults decreased 8 percent from the previous quarter.
Arizona posted the nation's second highest state foreclosure rate in the third quarter, with one in every 53 housing units receiving a foreclosure filing, and California posted the nation's third highest state foreclosure rate, also with one in every 53 housing units receiving a foreclosure filing during the quarter.
With 250,054 properties receiving foreclosure filings during the quarter, California accounted for nearly 27 percent of the nation's total. The state's foreclosure activity decreased nearly 2 percent from the previous quarter thanks to a 10 percent drop in default notices, but scheduled auctions increased 4 percent from the previous quarter and REOs increased 12 percent from the previous quarter.
Separately, ForeclosureRadar, a website that tracks every California foreclosure and provides daily auction updates, reported that California foreclosures in September were flat but considerably higher than a year ago when a state-mandated moratorium on foreclosures went into effect. Overall, foreclosure sales in California remain depressed, though the percentage of foreclosures being sold to third parties, typically investors, has risen dramatically.
Despite expectations that foreclosure cancellations would begin rising dramatically as homeowners successfully complete 3 month trial periods under the Home Affordable Modification Program, ForeclosureRadar said cancellations are decreasing with no clear sign to date that the program is having any impact on foreclosures.