Banks appear to have begun picking up the pace of foreclosures on residential real estate in August, reducing the time before the housing industry works through the overhang of troubled properties, according to RealtyTrac.
RealtyTrac specializes in the market for foreclosed and otherwise distressed real estate.
Economists and housing experts have maintained that the U.S. housing industry will not pick up until it has resolved the bulk of these troubled properties.
According to the firm's “Foreclosure Market Report” for August, 78,880 borrowers received notices of default last month, the first step in the formal foreclosure process in most states. This is still 18% down from the number of default notices sent in August 2010, but a full 33% over the number sent in July and a nine month high, the firm reported.
The firm added that default notices increased more than 40% on a month-over-month basis in several states, including New Jersey (42%), Indiana (46%) and California (55%), but were still down from a year ago in all of those states.
“The big increase in new foreclosure actions may be a signal that lenders are starting to push through some of the foreclosures delayed by robo-signing and other documentation problems,” said James Saccacio, chief executive officer of RealtyTrac. “It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process.”