Foreclosure starts soared during the month of August in states along the country’s western coast, reversing what had been a declining trend over the past several months, according to the tracking firm ForeclosureRadar.
The California-based company keeps close tabs on foreclosure activity in the states of Arizona, California, Nevada, Oregon, and Washington. ForeclosureRadar recorded a spike in the first notice filed in the foreclosure process across its five-state coverage area last month.
ForeclosureRadar says the jump appears to have been primarily driven by Bank of America and its related entities, which initiated 116 percent more foreclosures in August than in July. Wells Fargo and U.S. Bank also saw increases in foreclosure start filings, while filings by JPMorgan Chase and Citibank were essentially flat.
“Bank of America appears to be primarily responsible for the surge in foreclosure starts this month,” said Sean O’Toole, founder and CEO of ForeclosureRadar.
“Since their average time to foreclose has recently increased to more than a year, it is unclear that these foreclosure starts will lead to an increase in foreclosure sales anytime soon,” O’Toole noted.
Foreclosure sales also increased throughout most of ForeclosureRadar’s coverage area in August.
Investors bought more properties on the courthouse steps in August than in July everywhere except in Washington, while the number of properties taken back by the bank jumped significantly in Oregon and also rose in California and Nevada.
In Arizona, ForeclosureRadar found that notice of trustee sale filings jumped 15 percent between July and August, reversing a four-month downward trend.
Foreclosed properties sold back to the bank as REO, however, continued a five-month decline, with an 8.0 percent drop from July to August, and a 42.8 percent drop
compared to this time last year. Arizona investors were more active in August, with properties sold to third parties up 4.9 percent month-over-month and up 38.7 percent year-over-year.
California’s notice of default filings increased 69.5 percent to their highest level in 12 months. Notices of trustee sale were up more moderately, rising 6.0 percent month-over-month.
Activity on California courthouse steps increased in August. Properties returned to the bank as REO increased 12.3 percent from the prior month, while properties sold to third parties rose 9.9 percent. Time-to-foreclose in the Golden State increased to 333 days in August, which is 49 days longer than a year ago.
Notices of default in Nevada jumped 44.2 percent month-over-month, but fell 13.6 percent year-over-year. Notice of trustee sale filings slipped for the fifth consecutive month, dropping 9.9 percent from July.
Investor activity increased in August, with 19.8 percent more foreclosed properties sold to third parties in August than in July. Foreclosure cancellations declined for the fourth straight month, dropping 9.0 percent in August to the lowest level in 15 months.
Time-to-foreclose in Nevada jumped 14.3 percent in August when compared to July’s timeline, reaching a new record of 368 days. The time to resell a foreclosed home increased month-over-month for both banks and third-party investors, to 179 days and 108 days, respectively.
In Oregon notices of default were up in August over July by 35.6 percent, but filing activity remains 45.8 percent below this time last year.
Properties returned to the bank rose dramatically in the state, up 243.3 percent month-over-month, as Recontrust, a subsidiary of Bank of America, began to clear the 2,800 foreclosures it started in April.
Properties sold to third-party investors were up as well, 46.0 percent month-over-month and 17.4 percent year-over-year. The time-to-foreclose in Oregon dropped in August for the second month in a row, down 9 days from July to 150 days.
Washington saw a 3.4 percent increase in notice of trustee sale filings in August from July, which reversed four months of consecutive declines.
Activity on the courthouse steps slowed as foreclosures sold back to banks dropped 29.4 percent month-over month, and those sold to third-party investors were down 33.3 percent.