Foreclosures Head Back Up in July

By:: Kirk Haverkamp | August 12, 2010

U.S. foreclosure filings rose 4 percent in July after three months of declines, while bank repossessions edged close to an all-time high, according to new figures released today by RealtyTrac.

More than 325,000 residential properties, or one out of every 397 U.S. housing units, were subject to a foreclosure filing in July. It was the 17^th consecutive month that foreclosure filings exceeded 300,000 units.

Included in the total was nearly 93,000 bank repossessions, the second-highest total ever reported in the RealtyTrac survey and a 9 percent increase from the previous month. On an annual basis, bank repossessions were up 6 percent from July 2009.

Bank repossessions have been on the rise in recent months, as lenders work through a backlog of homes in default that built up due to loan modification efforts and state-imposed foreclosure moratoriums. Bank repossessions peaked in May at nearly 94,000 units, the highest level ever reported in the RealtyTrac survey.

New defaults were up 1 percent in July, to just over 97,000 properties, reversing three straight months of declines. Even so, the total represented a 28 percent decline from July 2009 and was 32 percent lower than the peak of more than 142,000 new defaults recording in April 2009.

New defaults and bank repossessions, representing the beginning and end of the foreclosure process, have been moving in opposite directions during the first half of 2010. New defaults have posed annual declines for the past six months (although with some month-to-month increases), while bank repossessions have shown annual increases for eight straight months now.

The trend suggests that fewer homeowners are getting into financial trouble, but those who are already in the foreclosure process are exhausting their options for keeping their homes.

The July total included more than 135,000 scheduled foreclosure auctions, a 2 percent increase over the previous month but a 14 percent decline from one year earlier. The total foreclosure filings reported each month is made up of new defaults, foreclosure auctions and bank repossessions.

Five states – California, Florida, Illinois, Michigan and Arizona – accounted for more than half of all foreclosures nationwide. Nevada continued to have the nation’s highest foreclosure rate for the 43^rd straight month, with one home in 82 subject to a foreclosure action.

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