Foreclosure activity in the United States ticked up seven percent in August, according to property intelligence firm's RealtyTrac's latest market report.
The report found that about 116,913 properties in the U.S. were either seized by the bank, scheduled for auctions or given default notices in the month of August.
Foreclosure starts were also up 12 percent in August on a month-over-month basis, but remained unchanged from the same time last year.
The number of properties put up for foreclosure auction was 51,192 - down one percent from a month ago, but up one percent from a year ago.
Lenders reportedly repossessed 26,343 properties in August The number was 2 percent above July's figures, but was down 33 percent on a year-on-year basis.
Foreclosure activity also increased in more than half of the U.S. states with Colorado (up 116%), Oregon (up 117%), Connecticut (up 81%) taking the top slots for the areas with the most foreclosures. Some metro areas have also been witnessing an uptick in foreclosure rates. The top five are listed below:
- Washington, D.C. - 18%
- New York - 18%
- Baltimore - 12%
- Atlanta - 11%
- Philadelphia - 11%
Darren Blomquist, vice president at RealtyTrac, explained that the sudden uptick in foreclosure activity was due to the fact that more banks are now initiating repossessing processes. During the financial crisis, many homeowners were allowed to stay in their homes despite falling short on the loan. But now that conditions are turning up, the banks are also streamlining their business.
"The August foreclosure numbers demonstrate that although the foreclosure crisis is well behind us, the messy business of cleaning up the distress lingering from the housing bust continues in many markets," Blomquist said in a statement.
"The annual increase in foreclosure auctions -- the first since the robo-signing controversy rocked the foreclosure industry back in late 2010 -- indicates mortgage servicers are finally adjusting to the new paradigms for proper foreclosure that have been implemented in many states, whether by legislation or litigation or both," he added.
But, Blomquist also added that the surge isn't something to worry about.
"It's not time to get worried about another tsunami of foreclosures hitting anything close to what we saw back in 2008 to 2010," Blomquist told Reuters. "However, it is reason to wake up and realize the housing recovery we've seen over the past two years is not as strong as it might have seemed."
Meanwhile, mortgage rates are still at record lows but, potential buyers aren't ready to take the property plunge yet. The Mortgage Bankers Association revealed in their latest weekly report that applications for mortgages fell to their lowest since Dec. 2000 by 7.2 percent in the week ended Sept. 07.
