The Charlotte region and North Carolina are seeing an increasing number of homes reverting to bank ownership, and on a much larger scale than seen across the nation.
According to RealtyTrac, the number of bank repossessions in the Charlotte-Concord-Gastonia region increased 146 percent in July to 473 from 192 a year earlier. There were 301 repossessions in the area in June.
In North Carolina, banks reclaimed 1,509 properties last month, up 212 percent from 484 properties in July 2014. Lenders took over 1,385 homes in June across the state.
The nation also experienced an increase in reclamations, to the highest level since January 2013, but at a much lower pace than in North Carolina. The number of homes nationwide that were repossessed in July grew 81 percent from a year earlier, to 46,957. Forty-four states recorded increases.
While lenders nationally have been pushing through foreclosure cases that have languished in the courts for years, the above-average rise in North Carolina caused RealtyTrac Vice President Daren Blomquist to look into the state-specific issues that might cause so many repossessions here.
Firstly, he cited the recent sunset of a state statute that protected military members against foreclosures proceedings while on active duty. While the law is due to be reinstated in October, it is possible that some banks are pushing through foreclosures during this time, he said. Rising prices, Blomquist noted, have made it more attractive for lenders to dispose of foreclosed properties.
In addition, he said, N.C. courts have had for several years the discretion of continuing foreclosure cases when they determine borrowers are making ongoing efforts to avoid losing their properties. The statute has been applied rather liberally in the past, Blomquist noted, and the courts now may be pushing through cases in an effort to clear their dockets.
Some states, meanwhile, saw even larger year-over-year increases in repossessions than North Carolina. They include Alabama, at 244 percent; Montana, at 625 percent; New Jersey, at 334 percent; New York, at 472 percent; Tennessee, at 534 percent and Vermont, at 280 percent.
RealtyTrac notes that the national number of repossessions last month, nearly 47,000, was still less than half the peak of 102,134 in September 2010.
At other end of the foreclosure process, RealtyTrac’s national data on starts showed them at the lowest level since November 2005. Blomquist said the nearly 10-year low demonstrates that the recent rise in bank repossessions represents “banks flushing out old distress rather than new distress being pushed into the pipeline.”
The methodology for measuring foreclosure starts varies by state, and considers factors that include notices of default and scheduled auctions. Thirty-one states saw a decline in the number of homes falling into foreclosure, but North Carolina was not among them. The Tar Heel state had 1,588 starts last month, up 103 percent from a year ago. One in every 970 homes in the Tar Heel state was in some stage of foreclosure last month.
In the Charlotte area, foreclosure starts rose 32 percent to 384 from a year earlier. One in every 753 homes with a mortgage was in the foreclosure process.
Florida had the highest foreclosure rate in the country in July, at one in every 408 homes. Among metros, Atlantic City topped the list, with one in every 258 homes in foreclosure.