US foreclosure filings on the rise but repossessions fall to a six-month low

US foreclosure filings rose by 7% in August and default notices increased more than 40% in several states, with just five states accounting for more than half of the total.

Default notices on a total of 78,880 properties were filed for the first time in August across the country, a nine-month high and a 33% increase from July, the biggest month-on-month rise since August 2007. However, despite the strong rise on the July figures, default notices were still down 18% from August 2010 and 44% below the monthly peak of 142,064 default notices in April 2009.

There were also 228,098 foreclosure filings − default notices, scheduled auctions and bank repossessions − reported in the month, according to the latest data from RealtyTrac. This equates to one in every 570 US housing units filing for foreclosure that month.

‘The big increase in new foreclosure actions may be a signal that lenders are starting to push through some of the foreclosures delayed by robo-signing and other documentation problems,’ said James Saccacio, chief executive of RealtyTrac.

‘It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process.’

Golden State takes a hit

Default notices increased by over 40% month-on-month in a number of states, including California, which saw a 55% rise, while they were up 46% in Indiana and 42% in New Jersey. This meant that in the worst hit Golden State, there were some 59,383 foreclosure properties, equating to one in every 226 housing units.

Percentage-wise, Nevada’s figures were even more shocking, with 9,677 properties – or one in every 118 housing units – in foreclosure. Vermont was the least affected, with just nine additional foreclosure properties or one in every 34,916 houses.

Florida posted the second highest total followed by Michigan, Illinois and Georgia,. Combined with California, the five states accounted for 53% of all foreclosure filings.

Las Vegas was the hardest hit metropolitan area, maintaining its unwanted status as having the highest default notice rate among cities with a population of 200,000 or more. It saw a 30% month-on-month increase, with one in every 103 Las Vegas housing units affected.