Foreclosure filings rose in nearly 60% of large U.S. cities in the first half of the year, indicating many areas will have more distressed homes on the market later this year, according to a report released Thursday by RealtyTrac Inc.
The jump in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” RealtyTrac Chief Executive Officer Brandon Moore said in a statement.
More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5% from the last six months of 2011, the Irvine, Calif.-based data provider reported. Among the 20 largest markets, Tampa, Fla.; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.
Throughout the U.S., first-half filings, while up from the previous six months, were down almost 11% from a year earlier, RealtyTrac said.
A $25 billion bank settlement announced in February eased loan terms for some borrowers and set new guidelines for the five largest U.S. mortgage providers. Recent laws passed in Nevada and California, meanwhile, have made it harder for loan servicers to resume property seizures, according to RealtyTrac spokesperson Daren Blomquist.
Even with new California laws, seven metro areas in the state ranked among the 10 highest for rates of foreclosure fillings per household, according to the company. The top three spots were held by Stockton, Modesto and Riverside, even as each city posted lower totals than a year earlier. In Tampa, where filings gained 47% from the latter half of last year, an 18-month backlog of bank-owned properties is compounded by widespread negative equity as almost half of residents in the area with a mortgage owe more than their homes are worth, Blomquist added.
Delayed seizures have contributed to tight supplies of homes for sale. The number of U.S. single-family houses, condos, townhomes and co-ops on the market last month dropped 19% from a year earlier, according to the National Association of Realtors’ website.
Across the nation, one in 126 households received a foreclosure notice in the first half, RealtyTrac said. Of the 212 metro areas with at least 200,000 residents, 125 cities had an increase in filings from the latter half of 2011.