Foreclosure Surge in Feb. is “Surprising,” RealtyTrac Says

Foreclosures nationwide surged 6 percent from January levels, and were up 30 percent from year-ago, according to data released Thursday morning by RealtyTrac, which provides nationwide listings of properties in foreclosure and owned by banks. The company’s data showed that foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 290,631 U.S. properties during the month, compared to 274,399 one month earlier. The increase in foreclosure activity from January to February is somewhat surprising, given that many of the foreclosure prevention efforts and moratoria in place in January were extended through most of February as well,” said James J. Saccacio, chief executive officer of RealtyTrac. Saccacio highlighted the effects of recent legislation in the foreclosure data, as well, including a 45-day voluntary moratorium in Florida expired at the end of January; foreclosure activity there was up 14 percent from the previous month, as a result. And New York saw foreclosures surge 23 percent, after a new state law had delayed the foreclosure process by an extra 90 days. Nationally, the increase in what’s called “foreclosure activity” was actually driven by two components — new borrower defaults and an increase in reported REO inventory. Actual foreclosure sales appear to have decreased, owing to the effect of new and pending legislation that is increasingly seeking to keep borrowers in their homes at almost any cost. Notice of Defaults and Lis Pendens — the first step in the foreclosure process — increased 10.6 percent between January and February, while reported REO volume increased 5.9 percent. In contrast, Notices of Trustee Sale and Notices of Foreclosure Sale — the final step in foreclosure that signals a courthouse auction is imminent — actually fell 1.4 percent. Foreclosure filings were reported on 80,775 California properties in February, RealtyTrac said, the most of any state and a 5 percent increase from the previous month. The state’s foreclosure activity increased 51 percent from February 2008, with auction sale notices increasing nearly 179 percent — the most of any category on a year-over-year basis. Florida and Arizona continued to rank second and third in overall foreclosure volume, according to the report. Write to Paul Jackson at [email protected].