Foreclosure filings in May spiked 9% compared with a month earlier, according to an industry group.
RealtyTrac reported that 205,990 U.S. properties received filings last month, including default notices, scheduled auctions and bank repossessions, marking the first monthly increase since JanuaryBank repossessions climbed steeply, up 7% to 54,844, after hitting a four-year low in April.
The industry had anticipated that there would be a new wave of foreclosures once the industry resolved the "robo-signing" issues, which came to light in late 2010. A settlement was finalized last April."With the settlement, it makes sense that the lenders would feel more confident pushing delinquencies through to foreclosure in May," said Daren Blomquist, a spokesman for RealtyTrac.
There was also a 12% jump in foreclosure starts. "The jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle," said Brandon Moore, CEO of RealtyTracThere has been a gradual change in how foreclosures are ultimately disposed of: Homes with delinquent loans are now more likely to exit the foreclosure process as a short sale than in the past, according to Blomquist.
"Short sales are driving down bank repossession numbers," he said.
And short sales also produce tangible benefits for both the banks and the market, according to Moore.
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