U.S. Foreclosure Activity Reversed Trend in October Driven by 17-Month High in Scheduled Foreclosure Auctions

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Foreclosure trend October 2014Biggest Monthly Increase Since U.S. Foreclosure Activity Peaked in March 2010; Top 5 State Foreclosure Rates in MD, FL, NV, OH, IL

IRVINE, Calif. – RealtyTrac® (www.realtytrac.com), released Thursday its U.S. Foreclosure Market Report™ for October 2014, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 123,109 U.S. properties, an increase of 15% from the previous month but still down 8% from a year ago. The 15% monthly increase was the largest month-over-month increase since U.S. foreclosure activity peaked in March 2010. The report also shows one in every 1,069 U.S. housing units with a foreclosure filing during the month.

A total of 59,869 U.S. properties were scheduled for foreclosure auction during the month, up 24% from the previous month and up 7% from a year ago to the highest level since May 2013. Scheduled foreclosure auctions in judicial foreclosure states, where foreclosures are processed through the court system, increased 21% from the previous month and were up 3% from a year ago and. Scheduled foreclosure auctions in non-judicial states increased 27% from the previous month and were up 14% from a year ago.

“The October foreclosure numbers are not a complete surprise given that over the past three years there has been an average 8% monthly uptick in scheduled foreclosure auctions in October as banks try to get ahead of the usual holiday foreclosure moratoriums,” said Daren Blomquist, vice president at RealtyTrac. “But the sheer magnitude of the increase this year demonstrates there is more than just a seasonal pattern at work. Distressed properties that have been in a holding pattern for years are finally being cleared for landing at the foreclosure auction.

Referring to the Mortgage Forgiveness Debt Relief Act, “With the November elections behind us, hopes of a stronger housing economy in 2015 are centered on the restoration of the short sale income forgiveness provision of the federal income tax code,” said Michael Mahon executive vice president and broker at HER Realtors, covering the Columbus, Cincinnati and Dayton, Ohio markets. “This at a time when consumers are being provided no financial support from the federal government concerning income tax relief when entering into short sale solutions with servicers. These economic catalysts are being considered much of the root causes regarding recent month-over-month increases of foreclosure activity.”

Scheduled foreclosure auctions increased from a year ago in 29 states, including Oregon (up 399%), North Carolina (up 288%), New Jersey (up 118%),  New York (up 89%), Connecticut (up 60%), Nevada (up 53%),  Alabama (up 41%), Washington (up 36%), Indiana (up 36%), California (up 19%) and South Carolina (up 18%).

Other high-level findings from the report:

  • Lenders repossessed 27,914 U.S. properties via foreclosure (REO) in October, up 22% from the previous month but down 26% from a year ago. October posted the largest monthly increase in REOs since June 2009.
  • REOs increased from a year ago in 16 states, including Maryland (up 190%), Pennsylvania (up 25%), New Jersey (up 22%), Oregon (up 20%) and New York (up 18%).
  • Overall foreclosure activity increased from a year ago in 10 of the nation’s 20 largest metropolitan statistical areas in terms of population, including Washington, D.C. (26% increase), Philadelphia (13% increase), Baltimore (13% increase), Riverside-San Bernardino in Southern California (8% increase), and New York (7% increase).
  • Among the nation’s 20 largest metros, those with the five highest foreclosure rates were Miami (one in every 363 housing units with a foreclosure filing); Tampa (one in every 395 housing units); Baltimore (one in every 435 housing units); Riverside-San Bernardino in Southern California (one in every 495 housing units); and Chicago (one in every 553 housing units).
  • A total of 56,452 U.S. properties started the foreclosure process in October, up 12% from previous month but down 4% from a year ago. This was the largest monthly increase in U.S. foreclosure starts since August 2011.

To read the full report click here.