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Foreclosure filings, which include default notices, scheduled foreclosure auctions and bank repossessions, were reported on 332,292 U.S. properties during October, a decrease of 3% from the previous month but still up nearly 19% from a year ago, according to RealtyTrac, an online marketplace for foreclosure properties, and its Foreclosure Market Report.

"Three consecutive monthly declines is unprecedented for our report, and on first blush an indication that the foreclosure tide may be turning," James J. Saccacio, RealtyTrac's CEO, said of the reports' findings.

"However, the fundamental forces driving foreclosure activity in this housing downturn – high-risk mortgages, negative equity, and unemployment – continue to loom over any nascent recovery," Saccacio said. "And despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states."

Despite a 26% decrease in foreclosure activity from the previous month, Nevada continued to document the nation's highest state foreclosure rate as one in every 80 housing units received a foreclosure filing in October. A total of 13,842 Nevada properties received a foreclosure filing during the month, a 4% decrease from October 2008 and the first ever year-over-year decrease in Nevada since RealtyTrac began tabulating the year-over-year change in January 2006.

Nevada default notices were down 10% from October 2008, and scheduled foreclosure auctions were down 6%, while bank repossessions were up 8% from October 2008. A new foreclosure mediation program implemented by state law in July may be slowing the inflow of distressed properties into the foreclosure pipeline, according to the report.

With one in every 156 housing units receiving a foreclosure filing in October, California posted the nation's second highest state foreclosure rate for the second month in a row. A total of 85,420 California properties received a foreclosure filing during the month, a decrease of 1% from the previous month but still nearly 50% above the total reported in October of last year.

The state's default notices and scheduled foreclosure auctions were up 120% and 73% respectively from October 2008, when California foreclosure activity was in the midst of a three-month trough after a law requiring lenders to give distressed homeowners extra notification before initiating foreclosure took effect in September 2008.

Florida posted the third highest state foreclosure rate, with one in every 168 housing units receiving a foreclosure filing in October. A total of 51,911 Florida properties received a foreclosure filing during the month, a nearly 6% decrease from the previous month and a decrease of 4% from October 2008. It was the first year-over-year decrease in overall Florida foreclosure activity since July 2006.

Four states accounted for 52% of the nation's total foreclosure activity in October: California, Florida, Illinois and Michigan.

Illinois posted the third highest state total after California and Florida, with 19,946 properties receiving a foreclosure filing in October, a 56% spike from the previous month and the highest monthly total for Illinois since RealtyTrac began issuing its report in January 2005.

The state's foreclosure rate jumped from No. 11 in September to No. 6 in October, and it was the only state with a foreclosure rate in the top 10 to post a monthly increase in foreclosure activity. A recent state law that gives distressed homeowners an extra grace period to seek counseling to help avoid foreclosure may have created some pent-up foreclosure activity in the state. After the law went into effect in April, Illinois foreclosure activity decreased for three straight months before beginning to climb again.

Michigan registered the fourth highest state foreclosure activity total despite a nearly 2% decrease from the previous month. A total of 16,468 Michigan properties received a foreclosure filing in October, an increase of nearly 45% from October 2008.

Other states with totals among the 10 highest in the country were Nevada (13,842), Arizona (13,345), Georgia (12,468), Texas (11,798), Ohio (11,646) and New Jersey (7,435).

Despite a 27% decrease in foreclosure activity from the previous month, Las Vegas continued to document the nation's highest foreclosure rate among metropolitan areas with a population of at least 200,000. One in every 68 Las Vegas housing units received a foreclosure filing in October, more than five times the national average.

Seven of the top 10 metro foreclosure rates were in California, led by Vallejo-Fairfield at No. 2 and Modesto at No. 3, both with one in every 81 housing units receiving a foreclosure filing. Other California cities in the top 10 were Riverside-San Bernardino-Ontario at No. 4 (one in 83), Bakersfield at No. 6 (one in 97), Merced at No. 7 (one in 100), Stockton at No 8 (one in 116), and Sacramento-Arden-Arcade-Roseville at No. 10 (one in 130).

Metro areas in Florida accounted for the remaining two spots in the top 10: Cape Coral-Fort Myers at No. 5 (one in 92) and Orlando-Kissimmee at No. 9 (one in 117), according to the report.

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