There was a total of 124,910 U.S. properties with foreclosure filings — default notices, scheduled auctions and bank repossessions — in July, up 7% from the previous month and up 14% from a year ago.
This marks the July fifth consecutive month with a year-over-year increase in overall foreclosure activity following 53 consecutive months of decreases.
Daren Blomquist, vice president at RealtyTrac, attributed the increases in activity primarily to rapidly rising bank repossessions, which in July reached the highest level since January 2013.
“Meanwhile foreclosure starts in July were at the lowest level since November 2005 — a nearly 10-year low that demonstrates the recent rise in bank repossessions represents banks flushing out old distress rather than new distress being pushed into the pipeline,” said Blomquist.
There were a total of 46,957 properties repossessed by lenders in July, up 29% from previous month and up 81% from a year ago to highest level since January 2013.
However, REOs in July were still less than half their peak of 102,134 in September 2010, but more than twice their pre-crisis average of 23,119 a month in 2005 and 2006.
Additionally, there were a total of 45,381 U.S. properties that started the foreclosure process for the first time in July, down 8% from the previous month and down 9% from a year ago to the lowest level since November 2005 — a nearly 10-year low.
Foreclosure starts in July were less than one-fourth of their peak of 203,948 in April 2009 and below their pre-crisis average of 52,279 a month in 2005 and 2006.
A total of 48,124 properties were scheduled for a future foreclosure auction in July, down 1% from the previous month and down 7% from a year ago following two consecutive months of year-over-year increases.
“This clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007,” said Blomquist.
“It’s also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory. RealtyTrac data now shows 61 percent of loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68 percent last year and 75 percent two years ago,” he continued.