Foreclosure activity dipped less than one percent from its record high in July, but activity was still up 18 percent year-over-year, according to foreclosure information service RealtyTrac.
“The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated,” said James J. Saccacio, chief executive officer of RealtyTrac, in a press release.
“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”
Real estate owned (REO) properties are those that have been foreclosed on and repurchased by the bank.
Six states accounted for 62 percent of the nation’s total foreclosure activity, though all of them saw a decrease in REOs.
California experienced its first year-over-year decrease in foreclosure activity since RealtyTrac began reporting monthly data, thanks to a 32 percent decrease in REOs.
However, the problem with the data, as mentioned by Saccacio, is that banks are methodically managing their stable of bank-owned properties, so conditions may appear better than they actually are (see shadow inventory).
Throw in the fact that we’ve got a ton of foreclosure moratoria and loan modification programs in place that haven’t exactly proven themselves (delays and re-default rates), and the supposed improvement/recovery isn’t so clear.
One in every 357 U.S. housing units received a foreclosure filing in August, compared with one in every 355 a month earlier.