Foreclosure activity rises 4% in August

The number of homes that received foreclosure filings — default notices, scheduled auctions, and bank repossessions — rose 4 percent in August from the month before, according to a monthly report by foreclosure data site RealtyTrac.

For the 18th straight month, foreclosure activity exceeded 300,000 properties, reaching 338,836. Despite the month-to-month increase, foreclosure activity dropped 5 percent compared to August 2009.

Of the three types of foreclosure filings, only notices of default decreased on either a month-to-month or year-over-year level. At 96,469, default notices fell 1 percent from July and 30 percent from August 2009. August was the seventh month in a row to see notices drop year-over-year. They peaked in April 2009 at 142,064, the report said.

Meanwhile, scheduled auctions rose 9 percent from July and 2 percent from August 2009, to 147,003 — the second highest monthly total since the site began keeping track in April 2005.

Bank repossessions in August shot up to a record high 142,064 properties, about 2 percent higher than the previous crop of bank-owned (REO) homes. REOs rose 3 percent compared to July and 25 percent compared to August 2009. August was the ninth consecutive month to see bank repossessions jump year-over-year, the report said.

"The trend lines of decreasing default notices and increasing bank repossessions converged in August, with virtually the same number of new default notices and bank repossessions for the month — a clear indication that the clogged foreclosure pipeline is being carefully managed on both ends by lenders and servicers," said James J. Saccacio, RealtyTrac’s CEO, in a statement.

"On the front end, seriously delinquent loans are rolling into foreclosure at an unusually slow rate, while on the back end the dammed-up inventory of properties already in foreclosure is moving to REO in a  steady stream rather than a flood — presumably to prevent further erosion of home prices."

Nationwide, one in every 381 housing units received a foreclosure filing in August. That’s up from one in 397 in July. Among the top 10 states with the highest foreclosure activity, only one state is new to the list this month: Hawaii.

The Aloha State climbed six spots to the No. 10 ranking in August — the second time the state has cracked the top 10 in the history of the report (the first time was in December 2009).

One in every 315 housing units in the state received a foreclosure filing last month. Hawaii had the highest month-to-month increase in foreclosure activity of any state (75. 2 percent) and the third highest year-over-year increase (87.5 percent). This excludes states where data-collection changes have have skewed the results.

For the 44th straight month, Nevada had the highest foreclosure rate in the country: one in 84 units received a foreclosure filing in August; Nevertheless, the state registered a 25 percent drop in foreclosure activity compared to August 2009.

Florida and Arizona switched places this month for the No. 2 and No. 3 spots, respectively. Florida’s foreclosure activity rose 10.3 percent compared to July, but fell 8.6 percent compared to August 2009. One in 155 housing units received a foreclosure filing.

In Arizona, foreclosure activity rose 1.3 percent compared to July and fell 7.3 percent compared to August 2009. One in 165 units received a foreclosure filing.

California and Idaho kept their No. 4 and No. 5 spots in August, with one in 194 and one in 220 units receiving a foreclosure filing, respectively. Foreclosure activity in California fell 25.1 percent year-over-year, but rose 11.3 percent in Idaho during the same period.

Both Utah (No. 6) and Georgia (No.7) had higher foreclosure rates this month compared to August 2009: with 25 percent and 27 percent increases, respectively.

Michigan dropped two spots on the list to No. 8 — its foreclosure activity fell 5.7 percent month-to-month and 8.2 percent year-over-year. Illinois also dropped one spot to No. 9 with a 14.3 percent month-to-month decrease in activity. The state registered a 28.5 percent year-over-year increase, however.

California, Florida, Michigan , Illinois and Arizona accounted for more than half of all foreclosure filings activity nationwide. Twenty percent of all activity was situated in California, while Florida was home to 17 percent of the overall activity.

Top 10 states with the highest foreclosure activity in August:

Source: RealtyTrac.

The top 10 foreclosure hotspots in the nation appear to be cooling down — all of these metros posted year-over-year declines. In metro areas with a population of 200,000 or more, the Las Vegas-Paradise, Nev., area had the highest foreclosure rate: 1 in every 73 housing units collected a foreclosure filing in August. That marked a 25 percent decline in activity compared to the same month last year.

Modesto, Calif., came in at second with a ratio of 1 in 95 housing units — a decline of 10 percent compared to August 2009.

Top 10 foreclosure hotspots (metro areas):

Source: RealtyTrac.