SAN FRANCISCO – Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac reported.
More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the data provider from Irvine, Calif., said Thursday.
Among the 20 largest markets, Tampa, Fla., Philadelphia; Chicago and New York City had the biggest percentage increases in filings.
The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide.
More repossessions will buoy deals in many local markets where a shortage of aggressively priced inventory has been holding up sales, RealtyTrac Chief Executive Officer Brandon Moore said.
A $25 billion bank settlement announced Feb. 9 eased loan terms for some borrowers and set new guidelines for the five largest U.S. mortgage providers. Recent laws passed in Nevada and California, meanwhile, have made it harder for loan servicers to resume property seizures, said Daren Blomquist, a RealtyTrac spokesman.
The top three spots were held by Stockton, Modesto and Riverside, all in California, even as each city posted lower totals than a year earlier. Phoenix and Las Vegas also had decreasing tallies, while Atlanta filings rose 4.8 percent for the only gain among the top 10.
In Tampa, where filings gained 47 percent from the latter half of last year, an 18-month backlog of bank-owned properties is compounded by widespread negative equity, Blomquist said. Almost half of residents in the area with a mortgage owe more than their homes are worth, he said.
Chicago, where 46 percent of borrowers have negative equity, has an aging inventory of highly distressed inner-city homes and many homeowners with subprime loans, Blomquist said. Investors scouring the U.S. for properties to fix up are shunning those neighborhoods, he said.