New foreclosures increased in third quarter

According to a recent report from the Comptroller of the Currency, newly initiated foreclosures in the United States increased in the third quarter of 2011, and are expected to remain at elevated levels well into 2012. Total new foreclosures in the third quarter jumped 21.1 percent compared with the total in the second quarter.

Prior to the increase in foreclosures, lenders were voluntarily freezing their foreclosure practices after investigations into their shoddy activities put pressure on the financial institutions. However, as those investigations completed, lenders started to sort through their back up of foreclosure paperwork, resulting in large numbers of distressed homes entering the housing market. Between July and September, 347,726 new foreclosures were reported, totaling 1.33 million foreclosures processed at the end of the third quarter.

"With this continued high level of seriously delinquent mortgages out there we will continue to see a high level of new foreclosure starts and at some point in the relatively near future we can expect to see the number of competed foreclosure sales ... starting to pick up and increase," said Bruce Krueger, lead mortgage expert at the OCC.

However, the report also found the percentage of delinquent loans declined significantly in the third quarter compared to the same period in 2010. The percent of loans more than 60 days delinquent decreased 13.8 percent from the third quarter last year.

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