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Mortgage-default filings surge in Indiana, nation

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Default notices sent to delinquent U.S. homeowners surged 33 percent in August from the previous month, a sign that lenders are speeding up the foreclosure process after almost a year of delays, RealtyTrac Inc. said.

Indiana saw an increase of 46 percent, a bigger rise than every state except California.

First-time default notices were filed on 78,880 properties nationally, the most in nine months, the Irvine, Calif.-based data seller said Thursday in a report. Total foreclosure filings, which also include auction and home-seizure notices, increased 7 percent, from a four-year low in July to 228,098. One in 570 homes received a notice during August.

On a year-over-year basis, foreclosure filings dropped for an 11th straight month after claims of “robo-signing,” or pushing through documents that weren’t verified, spurred an investigation by state attorneys general in October. The jump in default notices from July—the biggest monthly gain in four years—shows that banks’ paperwork delays are easing even as industry talks to settle the probe continue, RealtyTrac said.

“The industry seems to be hitting the reset button and the logjam may finally be breaking up,” Rick Sharga, senior vice president, said. Foreclosure filings this year have been “artificially low,” he said.

Total filings in August dropped 33 percent from a year earlier. Default notices fell 18 percent from the year before, while scheduled auctions slid 43 percent from August 2010 and 1 percent from the previous month.

Lenders seized 64,813 properties in August, a 4-percent decline from the previous month and a 32-percent slump from a year earlier, according to RealtyTrac. The jump in default notices means repossessions probably will increase in coming months as more foreclosures are processed, Sharga said.

Default notices increased from July by 55 percent in California, 46 percent in Indiana and 42 percent in New Jersey, according to RealtyTrac. Nine of 10 metropolitan areas with the highest rate of filings per household also had double-digit increases.

Nevada had the highest foreclosure rate, with one in 118 households receiving a filing, followed by California at one in 226 and Arizona at one in 248. Georgia, Idaho, Michigan, Florida, Illinois, Colorado and Utah rounded out the top 10.

In Las Vegas, where default notices jumped 30 percent from July, one in every 103 households received a foreclosure filing. That was more than five times the national average.

California led in total filings with 59,383 and Florida was second at 23,569. Michigan ranked third at 13,016, Illinois was fourth at 12,493 and Georgia was fifth at 11,743. The five states accounted for 53 percent of all foreclosure filings in the country, according to RealtyTrac, which sells default data from more than 2,200 counties representing 90 percent of the U.S. population.

Indiana was 16th in foreclosure filings in August, with 3,164.

 

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