Foreclosure filings in May exceeded the 200,000 mark for the first time in three months as more servicers moved to take possession of real estate collateralized by delinquent home mortgages, according to new figures compiled by RealtyTrac.
In May 205,990 foreclosure filings were recorded nationwide, a 9% increase from the prior month. However, compared to a year ago, filings fell 4%.
One in every 639 housing units had some type of default notice, scheduled auction or bank repossession during the month, RealtyTrac reported.
The resurgence in foreclosure filings was sparked by an uptick in default notices or scheduled auctions. In total, 109,000 new actions occurred across the nation in May. This is a 12% month-over-month rise and is 16% higher than the same period last year, marking the first annual increase in foreclosure starts since January 2010.
Year-over-year, foreclosure starts rose in 33 out of 50 states — 17 of which follow the judicial foreclosure process.
Some of the biggest annual increases in foreclosure starts included the judicial states of New Jersey (up 118%), Pennsylvania (97%), Florida (83%), Massachusetts (60%), New York (59%) and South Carolina (43%), while the largest gains for nonjudicial states were seen in Tennessee (165%), Texas (51%), Missouri (35%), Georgia (30%) and Michigan (24%).
"The jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle,” said Brandon Moore, CEO of RealtyTrac, Irvine, Calif. “Based on the rise in pre-foreclosure sales we've seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward."
However, bank repossessions rose on a monthly basis in May by 7%. Servicers and banks completed the foreclosure process on 54,844 properties during the month, which is down from last year by 18%.
REO activity increased on an annual basis in 17 states during May, led by a 66% jump in North Carolina. Other notable states that saw more REO activity include Illinois, Massachusetts, Florida, Georgia and Ohio.
Due to a 33% increase in foreclosure activity for the month, Georgia surpassed Arizona, Nevada, California, Illinois and Florida, respectively, posting the nation's highest foreclosure rate for the first time since February 2006. In the Peach state, one in every 300 housing units had a foreclosure filing in May.
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