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IRVINE, CA-REO activity in the residential market increased in May from the previous month in 33 states including western states Oregon and Colorado, reports RealtyTrac, a locally based online resource for real estate and foreclosure data. As GlobeSt.com reported last week, several Western markets have seen foreclosure starts increase dramatically despite nationwide defaults being down 28% over May 2012, according to the firm, and the rise in bank repossessions helped boost that figure.

In May, the number of REOs increased up to 57% in Oregon and up to 23% in Colorado. REOs increased 9% from the previous month in non-judicial states and were up 13% from April in judicial states. RealtyTrac reports that nationwide repossessions increased 11% in May over April. Among the five lenders involved in last year's national mortgage settlement, all but one (Citi) posted monthly increases in REO activity, indicating that temporary stoppages of foreclosure sales announced during the month by some of the lenders involved in the settlement had little lasting impact on the number of completed foreclosures for the month.

According to Craig King, COO of Chase International brokerage, which covers the Reno and Lake Tahoe markets, “Given the shortage of inventory and rising home prices, banks have little motivation to hold back on any foreclosures, so homeowners who have not been making payments for several months or even years without a foreclosure notice should expected to see that notice coming and would be well-advised to list their home as a short sale if they have no other alternative to avoid foreclosure.”

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