By Mike Colpitts
Foreclosure auctions rose in July, but were down from their peak 14% for the month on residential properties nationally, according to the Realty Trac. However, all initial foreclosure notices issued against properties for the month showed a sharp increase.
It was the seventeenth consecutive month total foreclosure activity topped 300,000 units. All foreclosure notices, including notices of default, bank repossessions and scheduled auctions were reported against 325,229 properties for the month, indicating homeowners are increasingly troubled by high unemployment and economic problems.
Five states accounted for more than half of the national total with California taking 21% in the month, despite a special state tax credit of $10,000 for home buyers to make a purchase. Florida made up 16% of the national total and Illinois saw activity increase 33% to take third on the list. Michigan and Arizona accounted for the remaining hard hit states.
Some 97,123 homes and other U.S. residential properties received a default notice during the month, usually the first step in the painful foreclosure process. However, foreclosure auctions were scheduled for the first time against 135,249 residential properties.
Lenders formally foreclosed on 92,858 properties in July, marking a 9% increase from June. Bank repossessions were the second highest since Realty Trac has been keeping track of REO activity since April of 2005. Nevada maintained its position as the nation’s foreclosure capital with the highest foreclosure rate for the 43rd straight month.
But Arizona total foreclosure activity dropped on a year-over-year basis for the sixth straight month, possibly indicating that at least banks and mortgage lending companies in Arizona are working with troubled homeowners more agreeably to modify mortgages and conduct short sales, in which lenders agree to cut the balance on a home mortgage to sell a property.
Troubled by the impact of the Gulf oil spill, Florida had the third highest foreclosure rate for the month, while California retained the fourth highest in the nation. Total foreclosure notices rose in Idaho rose nearly 19% for the month, boosting the state’s foreclosure rate to the fifth position. One in every 240 Idaho housing units received at least an initial foreclosure notice during the month.