REOs Rise in Three Western States

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IRVINE, CA-Oregon, Nevada and California made locally based RealtyTrac's list of states with the top-10 highest REO increases during third quarter, the firm reports. While US bank repossessions decreased 24% from a year ago, they were up 7% from the previous quarter.

As GlobeSt.com reported earlier today, foreclosures hit their 36^th straight month of decreases, according to RealtyTrac. The firm reports that foreclosure filings saw a 2% decrease in September from the previous month and a 27% decrease from a year ago.

Yet REO activity seems to be moving in the opposite direction in some states, and the nation is on pace for close to half a million bank repossessions for the year. REO activity increased 35% in Oregon during the quarter, 29% in Nevada and 19% in California. The quarterly increase in REOs nationwide was driven by quarterly increases in 26 states, including those three, reports RealtyTrac.

“Even in these three non-judicial states, where there is not a massive shadow inventory of delayed foreclosures sitting in the wings a la Florida and Maryland and some of the Northeastern states, there is still some shadow inventory thanks to legislation in each state that tinkered with the foreclosure process over the past couple years,” Daren Blomquist, VP of RealtyTrac, tells GlobeSt.com. “I would expect to see some more of these jumps in different stages of foreclosure activity in these states as lenders continue to adjust to this legislation. On the other hand, if you look at a similar state in the region, Arizona, there is virtually no shadow inventory because there were no state laws there that change the foreclosure process. And in that state, the foreclosure starts and bank repossessions (REOs) continued to trend downward in the third quarter.”

According to Craig King, COO of Chase International brokerage, which covers the Reno and Lake Tahoe, NV, markets, “Foreclosures have declined dramatically in Northern Nevada and the foreclosure level is quickly approaching national averages; however, Senate Bill 300 is having an effect on housing statistics in this market by contributing high levels of variability in monthly foreclosure levels. “Lenders are changing forms and paperwork to correspond to new laws, and they believe the foreclosure processes will be dramatically slowed for the next several months.”

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