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IRVINE, CA-Foreclosure starts are “bouncing higher” in a handful of non-judicial states where servicers are adjusting to legislation designed to prevent improper foreclosures, said Daren Blomquist, VP of RealtyTrac, an online source of real estate and foreclosure data, in a prepared statement. Those states include Western states Nevada, Washington, Oregon and California.

Blomquist added that in Nevada and Washington, “foreclosure starts have been increasing on an annual basis since late 2012,” while in Oregon and California, “foreclosure starts are still down from a year ago but have been moving steadily higher in recent months.”

Blomquist tells GlobeSt.com that the way servicers are adjusting varies depending on the nature of the state legislation. “In some cases, it's just a matter of incorporating a new procedure or piece of paperwork into their process. That would be the case in Nevada, where the legislation required an additional affidavit to be filed prior to the initial foreclosure notice. Similarly, in Washington State, lenders are now required to offer mediation to distressed homeowners prior to initiating foreclosure.”

He adds that in the case of Oregon, servicers are actually resorting to filing foreclosure judicially to avoid the minefields for them now associated with the non-judicial process because of a combination of a new law and State Supreme Court ruling there that clamped down on the non-judicial foreclosure process. “After that court ruling in July, we started to see judicial foreclosure filings in Oregon go from literally about zero to now several hundred a month (more than 500 in April alone). We suspect that we may start to see more judicial filings in California as well, but that remains to be seen.”

RealtyTrac's most recent foreclosure market report shows that nationwide, foreclosure starts are down, although judicial foreclosure auctions hit a 30-month high in April. Overall US foreclosure activity dropped to a six-year low last month.

As GlobeSt.com reported earlier this week, RealtyTrac has released the top 20 markets throughout the country for flipping homes. The firm's research ranked Orlando, Las Vegas and Phoenix on the top of the list, with Vallejo, CA; Denver; and Detroit rounding out the bottom.

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Instant Insights /

Foreclosure Starts Rise in Some Western States

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