Foreclosure Activity Continuing to Increase in the U.S.

As of June 30, some 22.5% of all U.S. homes had a mortgage that was under water, according to CoreLogic. That's 10.9 million properties. Another 2.4 million borrowers had less than 5% equity in their home. Industry experts say a housing market turnaround isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market. "We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level," said RealtyTrac CEO James Saccacio.

Foreclosure Activity Hit 7-Month High in October

November 11, 2011

AP - More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.

Some 77,733 properties received an initial default notice last month, up 10% from September, foreclosure listing firm RealtyTrac Inc. said Thursday.

The numbers are further evidence foreclosure activity is picking up.

The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation's largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid — something that lenders are seeing more of as the economy struggles and unemployment remains high.

The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.

The credit reporting agency said 5.88% of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82% in the second quarter of 2011.

The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders. As of June 30, some 22.5% of all U.S. homes had a mortgage that was under water, according to CoreLogic. That's 10.9 million properties. Another 2.4 million borrowers had less than 5% equity in their home, the firm said.

Industry experts say a housing market turnaround isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October's increase in foreclosure activity means a potentially faster revival for housing.

"We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level," said RealtyTrac CEO James Saccacio.

In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.

Florida posted a 28% jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50% increase and Indiana registered a 61% gain, according to RealtyTrac.

In some cases, though, government intervention is slowing lenders down.

Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed. Saccacio said the law helped cause a 75% drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.

"It's like a rain delay," Saccacio said. "We'll eventually see foreclosure processing go up."

Despite registering a 34% drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.

• In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7% from September, but down nearly 31% from October 2010.


• Foreclosure auctions rose 8% from September, but climbed by more than 35% in several states, including Florida, Minnesota and Illinois.


• Lenders took back 67,624 properties in October, up 4% from the previous month, but down 27% from a year earlier.


• Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45%, while in New Jersey they posted a 48% jump. Indiana registered a 73% increase.