REAL ESTATE NEWS...Foreclosures Rise by 14% in 2015: RealtyTrac

The number of properties in some stage of the foreclosure process rose by 14% from July 2014 to July 2015, RealtyTrac reported. The uptick, the real estate data firm said, is due to the fact that financial institutions moved to close their books on properties that lingered for months or even years in the foreclosure process.

July was the fifth consecutive month in 2015 during which foreclosure numbers were higher than they were a year before, the Irvine, Calif.-based firm said.

The number of properties that were repossessed - the final step in the foreclosure process - stood at 47,000 in July 2015, which represents a 29% increase since June 2015 and an 81% increase since July 2014, RealtyTrac said. Foreclosures are now at their highest level since January 2013, according to the firm’s data. However, the firm also reported that the number of July 2015 repossessions is less than half than the number reported in September 2010, when they were at their peak, the firm added.

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“The increase in overall foreclosure activity over the last five months has been driven primarily by rapidly rising bank repossessions, which in July reached the highest level since January 2013,” RealtyTrac Vice President Daren Blomquist said. “Meanwhile [new] foreclosure stats in July were at the lowest level since November 2005 — a nearly 10-year low that demonstrates the recent rise in bank repossessions represents banks flushing out old distress rather than new distress being pushed into the pipeline,” he said. New foreclosures refer to properties that are just entering the process.

Blomquist continued, “This clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007. It’s also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory. RealtyTrac data now shows 61% of loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68% last year and 75% two years ago.”