WASHINGTON—Over one million U.S. property owners filed for foreclosure in the first half of 2012, as foreclosures began increasing in the second quarter for the first time since 2009.
Foreclosure filings for the first six months of 2012—which include default notices, auction sale notices, and bank repossessions—represent a 2 percent increase from the last six months of 2011, according to a report by RealtyTrac, an online data collator and marketplace for foreclosure properties.
Despite the rise, the 1,045,801 foreclosures in 2012 are still down 11 percent on the first half of 2011, the report states.
The foreclosures for the first half of the year did increase since last year for 20 states, however, with Indiana having the largest increase at 32 percent; and with foreclosures in Pennsylvania, South Carolina, Florida, and Illinois rising to between 22 and 24 percent.
Overall foreclosure activity, however, was down in the second quarter. RealtyTrac credited the decline to a drop in bank repossessions (REOs).
“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” Brandon Moore, CEO of RealtyTrac, said in a statement.
Foreclosure processes vary across the country. Some states require judicial foreclosure, where local courts or the sheriff’s office administer the process and oversee the mortgage property auction. Other states allow non-judicial foreclosure, where the lender largely conducts the process.
Foreclosure filings picked up significantly in June, and homeowners in California were hit the hardest. An 18 percent year-over-year increase in America’s most populous state made it the highest nationwide increase for the month.
According to RealTrac, it is the first time California’s monthly foreclosure rate has ranked number one since the company began issuing its report in 2005.
Moore said lenders and service providers were catching up with a backlog of delinquent loans that would normally have started last year.
“The increases in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into next year,” he added.
The Obama administration released its own report on the nation’s housing market earlier this month, noting increases in new home sales and home equity, while acknowledging a “mixed outlook.”
Over five million mortgage holders were helped though a variety of relief programs, including homeowner assistance action, loss mitigation, and early delinquent intervention, according to the U.S. Housing and Development Department (HUD).
HUD Acting Assistant Secretary Erika Poethig said the department was “making important progress” in providing relief to homeowners, but acknowledged the difficulties that remained.
“With so many homeowners still underwater on their mortgages and struggling to move into more sustainable loans, we have much more work ahead,” Poethig said in a statement.
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