(Bloomberg News) Foreclosure filings in the U.S. fell 8 percent in February, the smallest year-over-year decrease since October 2010, as lenders began working through a backlog of seized properties, RealtyTrac Inc. said.
A total of 206,900 homes received notices of default, auction or repossession last month, down 2 percent from January, the Irvine, California-based data firm said today in a report. One in every 637 households got a filing.
U.S. banks slowed foreclosures for more than a year as attorneys general in all 50 states investigated charges of shoddy and incomplete paperwork used to repossess homes. A $25 billion settlement with the five largest lenders, announced Feb. 9, removed some barriers to property seizures and provided a "clear road map" for future actions, Brandon Moore, RealtyTrac's chief executive officer, said in the statement.
"February's numbers point to a gradually rising foreclosure tide," Moore said. "That should result in more states posting annual increases in the coming months."
Filings climbed in the 26 states where courts oversee foreclosures, rising 2 percent from January and 24 percent from a year earlier, RealtyTrac said. Half of the 20 largest metropolitan areas had gains, led by Tampa and Miami in Florida, a so-called judicial state.
In the 24 states where seizures can proceed without court approval, filings declined 5 percent from January and 23 percent from February 2011. Seattle and Phoenix, both in non-judicial states, led large metro areas with year-over-year decreases.
Riverside-San Bernardino, California, topped all U.S. metro areas with the highest foreclosure rate, one in 166 households, followed by Atlanta, Phoenix, Miami and Chicago, according to the report.
Default filings, a lender's first notice of serious delinquency, were sent to 58,886 U.S. properties last month, up 1 percent from January and down 7 percent from a year earlier. Defaults rose more than fourfold in Hawaii and more than doubled in Maryland, RealtyTrac said.
Auctions were scheduled on 84,180 homes in February, down 2 percent from the previous month and 13 percent from a year earlier. Auctions almost tripled in Kentucky and Illinois and almost doubled in Iowa and Pennsylvania.
Repossessions, the final stage of foreclosure, were completed on 63,834 properties, down 4 percent from January and 1 percent from February 2011. They more than doubled in Massachusetts and rose 95 percent in North Carolina, 90 percent in Florida, 87 percent in South Carolina and 76 percent in Georgia, RealtyTrac said.