RealtyTrac reported a decrease in foreclosure activity in September. September saw foreclosure filings on 265,968 properties, a 12% drop from August. 

Year-over-year, however, foreclosure filings are up 21%. RealtyTrac said that one in every 475 U.S. housing units received a foreclosure filing during the month.

RealtyTrac CEO James Saccacio attributed the decline "to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures." 

Saccacio noted particularly California where SB 1137 took effect at the beginning of September that requires lenders to make contact with borrowers at least 30 days before filing a notice of default (NOD).

"In September, we saw California NODs drop 51% from the previous month, and that drop had a significant impact on the national numbers given that California accounts for close to one-third of the nation"s foreclosure activity each month," he said.

North Carolina, another state which signed legislation back in August that slows down the foreclosure process, recorded a 66% drop in September.

He added, however, that Massachusetts experienced a 465% jump in foreclosure filings following slower activity in the previous three months related to their law that became effective last May that requires lenders to give homeowners a 90-day right to cure notice before proceeding with foreclosure actions. 

"But in September, about 90 days after the law took effect, initial foreclosure notices jumped back up close to the level we were seeing earlier in the year," Saccacio said.

The top states for foreclosure rates in September were Nevada, Florida and California.  Foreclosure filings in Nevada jumped 11% (up 137% from September 2007), Florida rose 9% (44% higher from a year ago), while California actually declined 32% for the month, but remains up 36% year-over-year.

For the quarter, foreclosure filings were made on 765,558 properties, over 3% higher from the second quarter and 71% higher from the third quarter 2007. RealtyTrac said that six states accounted for over 60% of US foreclosure activity in the quarter with California representing over 25%. 

In addition to California, the other states were Florida, Arizona, Ohio, Michigan and Nevada.

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