US bank home repossessions drive foreclosures to 18-month high

A surge in bank repossessions drive foreclosure activity to an 18-month high

PUBLISHED : Wednesday, 27 May, 2015, 12:53am
UPDATED : Wednesday, 27 May, 2015, 12:53am

A surge in bank repossessions of properties last month pushed overall foreclosure activity across the United States to an 18-month high, according to a report by industry firm RealtyTrac.

Overall, 125,875 homes across the country were at some point in the foreclosure process in April, a 3 per cent jump from March. The increase drove foreclosure activity up 9 per cent from year-ago levels, RealtyTrac said.

Last month's jump in foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions, was mainly driven by a 25 per cent rise in repossessions.

A total of 45,168 homes were reclaimed by banks in April, up 50 per cent from a year ago, bringing bank repossessions to their highest levels in 27 months.

RealtyTrac said the jump in repossessions was the aftermath of a surge in foreclosure starts that happened in October and that properties are going back to the foreclosing lender.

"In this particular market, an influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market," said RealtyTrac vice-president Daren Blomquist.

The US housing market has been steadily recovering, but is still plagued with a shortage of inventory that is driving prices up.

April was the second consecutive month in which banks reclaimed an increasing number of properties, but repossessions remain far below the peak in September 2013 when 102,134 properties were reclaimed.

Meanwhile, foreclosure starts and scheduled auctions have declined.

Lenders started the foreclosure process on 51,773 properties last month, down 3 per cent from March. That was a 5 per cent drop from the same period last year.

A total of 46,777 properties were set for auction in April, a drop of 8 per cent from the previous month.

Florida had the highest foreclosure rates last month, followed by Nevada, Maryland, and New Jersey, RealtyTrac said.