Foreclosure Filings Surge In August

Foreclosure filings – which can be anything from a default notice to an actual bank repossession, shot up in August by seven percent over July levels, according to RealtyTrac, an online foreclosure marketer.

However, the total of 288,098 filings was still down 33 percent over August 2010 levels, suggesting that the foreclosure crisis is easing. Still, the August increase could be a sign of trouble on the horizon.

“The big increase in new foreclosure actions may be a signal that lenders are starting to push through some of the foreclosures delayed by robo-signing and other documentation problems,” said James Saccacio, chief executive officer of RealtyTrac. “It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process.”

Different point of view

The mortgage industry, however, has a different take. In a speech to a Northern Virginia Realtors group Thursday, Mortgage Bankers Association CEO David Stevens said RealtyTrac's monthly headline on foreclosures is often misleading about the overall market, since real estate market conditions vary from state to state.

“Fifty percent of all foreclosure filings take place in just five states,” Stevens said. “Twenty-five percent occur in just one state – Florida.”

Stevens presented data showing that the default rate on mortgages issued since 2009 is less than two percent, and that the level of foreclosures is now back to 2007 levels, before the worst of the subprime mortgage meltdown.

In fact, the latest RealtyTrac report shows foreclosure auctions were scheduled for 84,405 U.S. properties in August, a decrease of one percent from the previous month and a decrease of 43 percent from August 2010. In fact, foreclosure auctions hit a 37-month low in August and were 47 percent below the monthly peak of 158,105 scheduled auctions in March 2010.