Overall foreclosure filings – default notices, scheduled auctions and bank repossessions – in the United States were reported on 128,560 properties in August, a drop of 2% compared to July and 34% compared to August 2012, according to RealtyTrac in its “U.S. Foreclosure Market Report for August 2013”.
Foreclosures activity has shrunk on an annual basis for 35 consecutive months. To foreclose means to take back a property because the borrower has failed to keep up with his or her mortgage repayments.
The drop in overall foreclosure activity was mainly driven by falling foreclosure starts in August, when 55,775 US properties started the foreclosure process.
August 2013 foreclosure start activity was 44% lower than in August 2012, and the lowest level since December 2005.
Foreclosure starts comparing August 2013 to August 2012
Thirty-eight states reported a fall in foreclosure starts in August compared to the same month in 2012, including non-judicial states such as Colorado -80%, Arizona and Washington -65%, California -57%, and Michigan -55%.
Many judicial states also experienced dramatic falls in foreclosure starts, including Illinois and Massachusetts -66%, Florida -65%, Indiana -43%, and Wisconsin -39%.
Foreclosure starts comparing August 2013 to July 2013
The following states had foreclosure starts increased in August compared to July 2013 – Nevada +226%, Ohio +44%, Maryland +24%, California +12, and New York +8%.
Bank repossessions
Banking repossessions (REO) rose by 6% in August compared to July 2013. However, REO activity was 25% lower in August 2013 compared to August 2012. During the three of the last four months REO activity nationwide has risen.
In 26 states bank repossessions increased in August 2013 compared to August 2012. Examples included New York +123% (34-month high), New Jersey +63% (31-month high), Florida +48% (7-month high), and Indiana +41% (9-month high).
In August, Nevada had the highest rate of foreclosures nationally, taking the number 1 spot from Florida, which is now number 2.
Daren Blomquist, vice president at RealtyTrac, said:
“The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year. Meanwhile foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August.”