Foreclosure activity decreased by 4% in October thanks to a dramatic decrease in the amount of bank repossessions, according to RealtyTrac, which monitors the foreclosure market.
Foreclosure filings totaled 332,172, making October the 20th consecutive month that more than 300,000 U.S. homeowners received a foreclosure notice. That number represents one in every 389 U.S. housing unit and is almost identical to the number of foreclosures posted in October 2009.
Lenders repossessed 93,236 U.S. properties in October, down 9% from the record high set in September, but still up 21% from October 2009. Default notices and foreclosures auctions, the other two stages of foreclosure, also declined, falling by 2% and 3%, respectively from September.
RealtyTrac Senior Vice President Rick Sharga explained that while the group has seen similar month-to-month decreases in overall foreclosure activity several times already this year, a 9% decrease in bank repossessions is unusually high and an indication that economic recovery isn’t responsible for the decline.
“All of the news we have heard about the housing market over the last few months has been pretty dismal,” Sharga said. “The bulk of this drop is directly related to the foreclosure freeze.”
In September, banks halted foreclosure filings after the federal government expressed concerns that the paperwork on distressed properties was not being processed correctly.
While federal officials investigated, many lenders said they would continue to serve default notices and schedule auctions before stopping short of finalizing the foreclosure, a practice that is directly reflected in the latest data. Bank repossessions, also called REOs, decreased month over month in 33 states and the District of Columbia, and 14 states posted year-over-year decreases in REOs.