Foreclosure filings jump as lenders correct paperwork issues

November 10, 2011 08:43AM

Foreclosure filings jumped 7 percent nationwide in October from the previous month, but remain nearly 31 percent below last year’s level, according to a report released today by RealtyTrac.

The rise comes as lenders have worked for the last year to correct foreclosure processing problems.

“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said RealtyTrac CEO James Saccacio.

New York had the third lowest foreclosure rate among the 50 states, as just one out of every 4,892 homes had foreclosures filed against them, compared to the national average of one in every 563 homes. October foreclosure filings fell 14.1 percent from September, and 57.1 percent from October 2010.

Elsewhere around the country (see interactive chart below), defaults hit 12-month highs in California, Florida and Michigan, while Vermont and North Dakota remained least affected by defaults. Though Nevada still has the top foreclosure rate in the country, at one in every 180 households, defaults hit a 64-month low in the state, thanks to a new law requiring lenders to record additional information in public records before filing for foreclosure.

Though that law helped Nevada in the short-term, RealtyTrac noted that the constant changing of foreclosure laws is prolonging the country’s foreclosure crisis.

“Recent State Court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery,” Saccacio said. — Adam Fusfeld