ALBUQUERQUE, N.M. — New Mexico was among the leaders of a nationwide trend of increased foreclosure activity in the third quarter, posting a 50 percent jump from the previous quarter, RealtyTrac reported Thursday.
The jump was driven by the front end of the process, with 1,659 homeowners receiving notice that foreclosure proceedings had been opened against them in the local district court. Another 1,236 houses were either scheduled to be sold in a foreclosure sale or had been repossessed by banks.
Nationwide, foreclosure activity ticked upward by an average of less than 1 percent from the second quarter to the third quarter, RealtyTrac reported. Only Vermont, at 85 percent, had a higher rate of increase than New Mexico. There were 27 states seeing declines in foreclosure-related activity.
The pickup in activity could mean a potentially faster turnaround for both the state and national housing markets. Experts say a revival isn’t likely to occur as long as there remains a glut of potential foreclosures hovering over the market.
The third-quarter increase in initial defaults was largely a product of a spike in August, when activity nationwide increased on average by 7 percent. In New Mexico, the increase in foreclosure activity was 39 percent in August.
The national jump in initial defaults during the July to September suggests banks are gradually addressing their backlog of homes in foreclosure and are now beginning to move on more recent home loan defaults, said RealtyTrac CEO James Saccacio.
Foreclosure activity began to slow last fall after problems surfaced with the way many lenders were handling foreclosure paperwork. Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, refiling previously filed foreclosure cases and revisiting pending cases to prevent errors.
The process of new foreclosures has been held up by court delays in states where judges play a role in the foreclosure process, lenders’ reluctance to take back properties amid slowing home sales.
While banks appear more willing to start the foreclosure countdown on borrowers, they haven’t put a dent in the overall length of the foreclosure process.