RealtyTrac: August Foreclosure Numbers Mixed

Real estate data released today show a mixed picture in California: Fewer homes are entering the foreclosure process but more are being seized by banks.

RealtyTrac's Daren Blomquist admits the numbers can be confusing.

"Because we look at properties - both foreclosure starts as well as the foreclosure completions when the properties go back to the banks," says Blomquist. "And they're showing two different things."

Starts - or notices of default that people get when they first enter the foreclosure process - were down in August, by 30 percent from a year ago. Blomquist says that's because people are getting better home loans, not the type of no-down payment loans that helped trigger the housing crisis.

"But we still do have a lingering so-called shadow inventory of properties that got into trouble during the last housing bubble," says Blomquist, "and still have not been resolved."

Blomquist says that's why bank repossessions in August were up 30 percent from a year ago.

So far this year, California has been averaging just under 3,000 bank repossessions a month. That's well below the peak of 17,000 in 2009.

Overall foreclosure activity in the state dropped in August by 20 percent from a year ago.

"Sacramento saw a similar trend to the state where overall foreclosure activity was down 15 percent from a year ago," notes Blomquist. He says Sacramento's overall foreclosure activity would be lower if it weren't for bank repossessions, which continue to "nag at the market."

"We did see a 49 percent increase in bank repossessions in Sacramento in August," says Blomquist "and that was the fifth consecutive month with an increase from a year ago."

Meanwhile, Nevada posted the country's highest home foreclosure rate in August. 

"That was the first time Nevada had been ranked number one since September 2014."

Blomquist says one-in-every 500 Nevada housing units had a foreclosure filing last month, more than twice the national average.

He says the state's four percent annual increase was driven by a jump in bank repossessions, which more than doubled in August. 

"The majority of the problem in Nevada, in fact 70 percent of the loans in foreclosure, are linked to loans that were originated back between 2004 and 2008," says Blomquist. "Because of the changes to the law in Nevada, it's taking longer for that state to work through some of those bad loans."

Blomquist says a big drop in California starts helped drop the state's overall foreclosure ranking to 19th in the country.