There was a surge in foreclosure activity in half of the nation's largest metropolitan areas in February, a housing report indicates.
Real estate data shows that last month, there were an estimated 206,900 foreclosure filings across the country, including mortgage default notices, scheduled auctions and repossessions, according to a recent report from RealtyTrac. This is a 2 percent increase from the previous month, but an 8 percent dip from February 2011.
"February's numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed," said RealtyTrac CEO Brandon Moore. "Although national foreclosure activity was pushed lower by decreases in a handful of larger states, 21 states posted annual increases in foreclosure activity, the most states with annual increases since November 2010."
Specifically, the report showed that foreclosure activity in states with a judicial foreclosure process increased 2 percent from the previous month, while spiking 24 percent on an annual basis. In contrast, states with non-judicial foreclosure practices fell 5 percent from January, while plummeting 23 percent from February 2011.
Meanwhile, some industry experts say the recent multibillion-dollar settlement reached between the nation's largest mortgage lenders and state attorneys general on behalf of homeowners wrongfully foreclosed on, will result in a more fluid foreclosure process in the coming year.
"The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures," Moore added. "That should result in more states posting annual increases in the coming months."
Regionally, Arizona, California and Nevada - states that have led the way with high foreclosure numbers in recent years - retained their top spots for having elevated rates. However, it was noted that although Nevada had the highest foreclosure rate for 62 consecutive months, filings in the state reached a 58-month low.
Meanwhile, California had the second-highest number of foreclosure filings during the month with a total of 48,422 distressed properties. This accounted for one out of every 283 homes in the state. In addition, foreclosures in Arizona rose for the second straight month, as one in every 312 homes in the state were in some stage of foreclosure.
Despite the increase in foreclosures, the government recently launched a pilot program that will work to sell REO properties to investors in bulk. Experts hope this action will help to clear out the nation's REO inventory, while cutting down on the vacancy rate in some areas.