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IRVINE, CA-US residential foreclosure filings decreased 2% in August from the previous month and are down 34% from August 2012, reports locally based RealtyTrac. The number of foreclosure starts is down 44% from a year ago, representing the lowest level since December 2005.

Despite the continual decrease in foreclosure starts nationwide, bank repossessions in August increased 6% from the previous month, but were still down 25% from a year ago, according to the firm. REO activity nationwide has increased on a month-to-month basis in three of the last four months, reaching a five-month high in August.

“The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year,” says Daren Blomquist, VP at RealtyTrac. “Meanwhile, foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline.”

As GlobeSt.com reported earlier this month, a total of 10.7 million residential homeowners nationwide owe at least 25% or more on their mortgages than their properties are worth, according to RealtyTrac. Also, another 8.3 million homeowners are either slightly underwater or slightly above water, putting them on track to have enough equity to sell sometime in the next 15 months without resorting to a short sale, the firm reports.

Click here for a video of Blomquist commenting on the report. For the complete report, click here.

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