Foreclosures jump 7% in October from September Stockton, Calif., has highest rate of foreclosure filings

Nov. 10, 2011, 12:01 a.m. EST

Foreclosures jump 7% in October from September

Stockton, Calif., has highest rate of foreclosure filings

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Foreclosure activity rose 7% in October compared with September, a sign that lenders are picking up the pace after foreclosure processing problems caused delays, RealtyTrac said Thursday.

Last month, foreclosure filings were reported on 230,678 U.S. properties, according to RealtyTrac data. Filings include default notices, scheduled auctions and bank repossessions.

Appraisals derail sales

In the past, appraisals rarely disrupted a home sale. But real-estate agents and housing experts say new requirements and a difficult housing market are doing just that.

Activity is down 31% in October compared with a year ago.

“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said James Saccacio, chief executive of RealtyTrac, in a news release.

“However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real-estate recovery.”

In October, after 22 months in a row as the city with the highest foreclosure rate, Las Vegas finally ceded that standing to Stockton, Calif., according to RealtyTrac’s ranking of metropolitan areas with populations of 200,000 or more.

Default notices up 10%

Nationwide, default notices were filed for the first time on 77,733 properties last month. That’s a 10% increase from the prior month, but a 23% drop from October 2010.

In Florida, Pennsylvania and Indiana, default notices ticked up more than 25% in October, compared with September.

Foreclosure auctions rose 8% in October, compared with the prior month; auctions were scheduled on 85,321 properties. Scheduled auctions were down 38% from a year ago. But again, the number of scheduled auctions was up even more in select states: They increased more than 35% in Florida, Minnesota and Illinois in October, compared with September.

In October, 67,624 properties were repossessed by lenders, a 4% increase from September and a 27% drop from October 2010. In Michigan, Oregon, New Jersey and Indiana, repossessions were up 40% or more in October, compared with the prior month.