Fewer US homes repossessed in October

LOS ANGELES — Fewer homes are completing the foreclosure process and ending up repossessed by banks because of a growing appetite among investors for buying properties at auction — before they end up on the market.

Some 37,775 homes nationwide completed the foreclosure process in October, down 1 percent from the previous month and 29 percent from a year earlier, RealtyTrac Inc. reported Thursday.

At the front end of the process, lenders initiated foreclosure action against 58,939 homes last month, an increase of 2 percent from September but a drop of 34 percent from October 2012.


Foreclosure starts have been down nationally on an annual basis for 15 months in a row, while home repossessions have fallen annually for 11 consecutive months.

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The decline has come about as more homeowners are keeping up with their mortgage payments. At the same time, the US housing market has emerged from a deep slump, aided by rising home prices, steady job growth, and fewer troubled loans dating back to the housing-bubble days.

‘‘We’re still firmly on the road back to normal foreclosure levels, but continue to see the foreclosure problem persist in areas that had delays in the foreclosure process,’’ said Daren Blomquist, a vice president at RealtyTrac.

Those areas generally include Florida, New York, and Illinois where the courts must sign off on foreclosures. Many properties that were delayed as state courts worked through a logjam of foreclosure cases got scheduled for public auction last month.

All told, 30,023 homes in states where the courts play a role were scheduled for public auction last month, up 10 percent from September and up 7 percent from October 2012.


Traditionally, most homes lined up for public auction end up going back to lenders, opening the door for the properties to be placed on the market at sharp discounts.

But the decline in completed foreclosures suggests many of the homes being auctioned are being purchased by investors.

Many investors are eager to buy homes at auction, where buyers must pay cash. That means they don’t have to compete against typical buyers, who finance the deal.

An average of 40,000 homes were taken back by lenders each month this year through October. That puts the nation on pace for just under 500,000 completed foreclosures this year. Foreclosures peaked in 2010 at 1.05 million.