Foreclosure Auctions Tick Up on Higher Home Prices

NEW YORK ( TheStreet) -- Foreclosure activity ticked up in October from the previous month as lenders auctioned off more distressed properties.

Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, were reported at 133,919 in October, a 2% increase from the previous month but a 28% decrease from a year ago.

Scheduled judicial foreclosure auctions rose 10% from the previous month and were up 7% from a year ago.

Foreclosure starts rose 2% from the previous month but were down 34% from a year earlier.

Foreclosure activity has been declining since 2010 but some states that follow the judicial foreclosure process are now starting to see a spurt in activity. Foreclosures in these states have been stalled due to a complex and lengthy court process but are now making their way through the pipeline.

In Florida, foreclosure activity rose 22% in October, driven by a 36% monthly increase in foreclosure starts.

Rising home prices also has made it more profitable for lenders to auction off homes through foreclosure, though the recoveries have not been as robust as expected.

"The backlog of delayed judicial foreclosures continues to make its way through the pipeline, with many of these properties now being scheduled for the public auction after starting the foreclosure process last year or earlier this year," said Daren Blomquist, vice president at RealtyTrac. "Lenders are likely moving these properties more rapidly to the public auction given that there is strong demand from institutional buy-to-rent investors at the auction and that rising home prices mean more of the loan losses can be recouped, either by selling to an investor at the auction or by repossessing the property and reselling as bank owned."

Florida, Nevada and Maryland figure in the top three states with the highest foreclosure rate.

-- Written by Shanthi Bharatwaj in New York.

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