Foreclosures, Repossessions Continue to Drop

Banks repossessed 29% fewer homes last month than in October 2012, the 11^th consecutive month of annual declines, according to RealtyTrac’s monthly U.S. Foreclosure Market Report. The 37,775 properties with bank repossessions on file was a 1% decline from September.

Foreclosures also sharply declined from 2012. Last month, one in every 978 U.S. housing units reported foreclosure filings — default notices, scheduled auctions and bank repossessions — a 28% decline from October 2012 and a 2% increase from September 2013.

After two months in the No. 2 spot, Florida regained the title of state with the most foreclosures: One in every 332 housing units had a foreclosure filing in October, a 22% increase from September, and that was mostly driven by a 36% month-over-month increase in foreclosure starts. Two Florida cities — Miami and Tampa — topped the list of metropolitan-area foreclosure rates.

Nevada, Maryland, Ohio and Illinois rounded out the five states with the highest foreclosure rates, and Chicago, Baltimore and Riverside-San Bernardino, Calif., took spots 3, 4 and 5 on the list of metro areas with the highest foreclosure rates.

States with judicial foreclosure processes, meaning the foreclosure requires court action, continue to wade through a backlog of distressed properties. Of the five states with the highest foreclosure rates, only Nevada is a non-judicial state.

In a news release about the report, RealtyTrac Vice President Daren Blomquist explained that the foreclosure process started on many of these properties last year or several months ago, and the judicial process has contributed to the backlog.

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“Lenders are likely moving these properties more rapidly to the public auction given that there is strong demand from institutional buy-to-rent investors at the auction,” Blomquist said. “Rising home prices mean more of the loan losses can be recouped, either by selling to an investor at the auction or by repossessing the property and reselling as bank owned.”

Scheduled judicial foreclosure auctions increased 10% from September and 7% from October 2012, with Maryland reporting the greatest jump — an increase of 177%.

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