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Lenders Picking Up the Pace of Foreclosures

RealtyTrac reported Thursday that 33 percent more notices of default reached American homeowners in August than in July, a sign that lenders are picking up the pace of seizures after slowing the process down for nearly a year.  During the month, a total of 78,880 homes received at least one delinquency notice, the highest total in nine months.  Total foreclosure filings, which also include auction and home-seizure notices, increased by 7 percent from a four-year low in July to 228,098.  In all, one out of every 570 US homes received a notice in August.

On a year-to-year basis, however, foreclosure filings were down in August for the eleventh straight month.  This slowdown in filings was spurred by revelations that lenders were using so-called “robo-signers,” or employees who routinely signed hundreds of foreclosure-related documents a day without verifying their contents.  The scandal led to a massive investigation by all 50 state attorneys general, launched in October.  The increase in notices over the last two months indicate that lenders are getting back to a normal pace of processing foreclosures.

Compared to last year, foreclosure filings in August were down 33 percent as default notices declined 18 percent and scheduled auction were down 43 percent.   Lenders seized a total of 64,813 homes through the month, down 4 percent from July and 32 percent from the same month in 2010.  The increase in notices would seem to indicate that the number of seizures will rise in the next few months as banks cut into their massive backlogs of delinquent homeowners and start foreclosing.

Among the 50 US states, Nevada had the highest foreclosure rate in August as one in 118 households received a filing.  California followed with a ratio of 1 in 226, then Arizona with a rate of 1 in 248.  The rest of the top ten consisted of Georgia, Idaho, Michigan, Florida, Illinois, Colorado and Utah.  As for individual cities, Las Vegas once again led the nation in foreclosure rate as one in 103 homes there received a filing.  That ratio was more than five times the national average.