In the first half of this year, the number of Connecticut homes with foreclosure filings jumped nearly 39 percent compared with the same period a year ago, a new report Thursday shows, as filings previously delayed when lenders were forced to tighten foreclosure procedures are again moving through the court system.
The increase compares with a decline of 19 percent for the nation as a whole, according to the report from RealtyTrac, which collects and markets data on foreclosures nationally and by state.
In the first six months of 2013, Connecticut had 9,462 residential properties with foreclosure filings, or 0.64 percent of all residential properties, according to the report from RealtyTrac
“The increase in Connecticut foreclosure activity over the past few months indicates that lenders and the court system there are finally catching up on foreclosures delayed by the robo-signing controversy that came to light in October, 2010,” said Daren Blomquist, vice president at RealtyTrac.
The robo-signing scandal involved some of the nation’s largest lenders, who signed off on foreclosure documents without verifying their accuracy. A wide-ranging investigation by state and federal officials has resulted in settlements in the tens of billions. The investigation delayed foreclosures as lenders were forced to review and later change their procedures.
In the first 10 months of 2010 — just prior to the scandal — there was a monthly average of 2,247 Connecticut properties with foreclosure filings. But from November 2010 to December 2012, the average was about half of that, or 1,188 a month, Blomquist said.
“So far this year, the average has jumped up to 1,627 a month, and we would expect that upward trend to continue at least through the end of this year because it will take some time for the foreclosure industry to catch up with the delayed foreclosures,” Blomquist said.
Blomquist said the majority of Connecticut properties with active filings, 73 percent of them were on loans originated between 2004 and 2008, a period characterized by a hot housing market, loose lending standards and some predatory loans.
“The good news is that the newer vintage loans, originated after 2008, represent only 11 percent of all loans in foreclosure in Connecticut,” Blomquist said.
The state had one filing for every 157 households in the first six months of 2013, making it the state with the eleventh highest concentation of properties with foreclosure filings. That compared with one in 164 nationwide, the RealtyTrac report shows.
Not every filing will result in a property being repossessed by a lender for failure to make mortgage payments. Connecticut has three filings: the initial notice or “lis pendens;” notice of foreclosure sale and notice of foreclosure, which signals a bank repossession.
In June, Connecticut had 1,196 properties with initial notices, up 47 percent from 813 the previous June. Properties repossessed by lenders totaled 402, essentially flat compared with 416 in June 2012.