Foreclosure filings on U.S. properties declined 3% from June to July, with 191,925 properties facing a notice last month, RealtyTrac said Thursday.

Filings also declined 10% from year-ago levels. The falling foreclosure activity levels are attributed to a 21% year-over-year drop in bank repossessions and REOs, according to the Irvine, Calif.-based research firm.

Still, RealtyTrac says 27 states saw starts increase year-over-year. Starts went up the most in the judicial foreclosure states of Connecticut (201% increase); New Jersey (164% increase); Pennsylvania (139%); Indiana (83%); and Massachusetts (65%).

“U.S. foreclosure activity continued its uneven descent in July as the overall numbers declined on an annual basis for the 22nd straight month, but properties starting the foreclosure process increased on an annual basis for the third straight month,” said Daren Blomquist, vice president of RealtyTrac.

“Recent foreclosure activity patterns vary significantly from state to state, often hinging on the level of dysfunction that exists in each state’s foreclosure process. In states like Florida, Illinois and New Jersey, where processing and procedural issues slowed foreclosure activity to a crawl last year, foreclosure numbers continue to rebound off those artificially low levels.”

In nonjudicial foreclosure states such as Texas, Arizona and Virginia, the average foreclosure time is well below the national average of 378 days and foreclosure activity continues to fall.

Blomquist suggests recent legislation and court decisions could lengthen the foreclosure process in some of the states. 

“Case in point is a new Oregon law that took effect in July and gives homeowners in default — or at risk of default — the right to request mediation to avoid foreclosure,” Blomquist said.

“Oregon foreclosure activity dropped 42% from June to July, hitting a five-year low, but we would expect the Oregon numbers to trend back higher sometime in the next several months based on the pattern we’ve seen in other states with similar legislation.”


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