The months-long slowdown in the base of real estate foreclosures appears poised to pick back up again, according to a firm which specializes in tracking economically distressed property.
RealtyTrac's U.S. Foreclosure Market Report for the third quarter showed overall foreclosure activity (which included the total of default notices, scheduled auctions and bank repossessions) had only risen 1% from the second quarter of this year.
But the firm also reported that initial default notices were sent to 14% more property owners than during the second quarter.
Since initial default notices are the first step in the foreclosure process in most states, the number indicated that more properties were moving into the process.
“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork,” said James Saccacio, CEO of RealtyTrac.
“While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up,” Saccacio said.
The rise in initial defaults indicated “that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures,” he added.