Surge in Defaults Leads to 7% Increase in Foreclosure Filings in August

*_CORRECTION: This article previously stated that August's 7 percent rise in filings was the first monthly increase since January. RealtyTrac has recorded two other upticks since that time - a 7 percent increase in March and a 4 percent increase in June._*

The lingering effects of the foreclosure moratoriums enacted after evidence of improper foreclosure processing came to light appear to be fading. Data released by ""RealtyTrac"":http://www.realtytrac.com Thursday shows foreclosure filings heading upward during the month of August, with all of the increase coming from new default notices.

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The tracking company says filings - including default notices, scheduled auctions, and bank-repossessed REOs - rose 7 percent between July and August on the national stage. But with the steep declines seen over previous months, filings remain 33 percent below the level recorded in August 2010.

Default notices posted their biggest month-to-month increase since August of 2007, up 33 percent. The 78,880 new default notices filed last month represents a nine-month high, but is down 18 percent from a year earlier.

Default notices increased more than 40 percent on a month-over-month basis in several states, including New Jersey (42 percent), Indiana (46 percent), and California (55 percent).

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James Saccacio, RealtyTrac's CEO, says the big increase in new foreclosure actions is a sign lenders are pushing foreclosures through and foreshadows more bank repossessions in the coming months.

Foreclosure auctions (NTS, NFS) were scheduled for 84,405 U.S. properties in August, a decrease of 1 percent from the previous month and a decrease of 43 percent from August 2010.

Despite the nationwide decrease, scheduled auctions were up substantially from the previous month in several states where the auction notice is the first public notice in the process, such as Oregon (19 percent), Arizona (20 percent), Georgia (22 percent), and Colorado (51 percent).

Lenders repossessed a total of 64,813 homes (REOs) in August, a 4 percent decrease from the previous month and a 32 percent decrease from a year earlier. The REO total in August marked a six-month low.

Five states accounted for more than half of the foreclosure activity in August. Leading the pack was California, where 59,383 properties had foreclosure filings during the month.

Florida posted the second highest state total with 23,569 filings, followed by Michigan (13,016), Illinois (12,493), and Georgia (11,743 properties).

""RealtyTrac's report"":http://www.realtytrac.com/content/foreclosure-market-report/august-2011-us-foreclosure-market-report-6836 shows that defaults surged in August in some of the hardest-hit local markets.

A 30 percent month-over-month increase in default notices helped Las Vegas maintain the nation's highest foreclosure rate among large metropolitan areas.

Eight of the metros with top-10 foreclosure rates can be found in California. All but Stockton posted a double-digit monthly increase in default notices. The biggest jump was found in Visalia-Porterville, where new defaults climbed 97 percent from the previous month.

Closing out the metro top-10 list is Reno, Nevada. There, new defaults rose 23 percent in August.