Foreclosure filings increased 7% in October from the prior month with servicers and banks recording default notices, scheduled auctions, and lender repossessions on 230,678 U.S. properties, according to new figures compiled by RealtyTrac.

However, compared to October of last year, filings fell 31%.

The Irvine-based analytics firm calculated that one in every 563 housing units in the nation was hit with some type of foreclosure filing during the month.

“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 James Saccacio, chief executive of RealtyTrac. “However, 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.”

Lenders repossessed 67,624 units during the month, a 4% increase from September, but down 27% from the year ago month. REO activity increased 40% or more on a month-over-month basis in several states, including Michigan (40%), Oregon (45%), New Jersey (48%), and Indiana (73%).

Once again Nevada, California, and Arizona were among the top states in foreclosure rates.
Despite a 34% sequential decline in foreclosure activity, Nevada posted the nation's highest state foreclosure rate for the 58th straight month. One in every 180 Nevada housing units had a foreclosure filing during the month, RealtyTrac reported — more than three times the national average.

California default notices increased 17% from the previous month to a 13-month high, helping the state post the nation's second highest foreclosure rate: one in every 243 housing units.

Arizona had the nation's third highest state foreclosure rate in October: one in every 259 housing units. Total foreclosure activity in Arizona increased nearly 18% from the previous month, but was down 36% from October 2010.

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