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US foreclosures up for first time in 27 months

NEW YORK -- Foreclosure starts in the U.S. rose year-over-year in May for the first time in more than two years — though they fell on a month-to-month basis — as banks resumed dealing with distressed properties after a mortgage abuse settlement earlier this year, data firm RealtyTrac said on Thursday.

The US$25 billion settlement between major banks and states, formally approved in April, had been expected to jump-start foreclosure proceedings that were previously stalled by uncertainty about the liability of banks.

Overall foreclosure activity, which includes default notices, scheduled auctions and bank repossessions, affected 205,990 properties in May, a 9.1-percent increase from April.

The figure was 4.2 percent lower, however, than in May 2011, RealtyTrac said in a monthly report.

Foreclosure starts grew 12 percent from April and 16 percent on an annual basis after 27 straight months of year-over-year declines. Foreclosure starts were filed on 109,051 homes in May, the first month-to-month rise since March.

Bank repossessions increased 7 percent after sinking to a 49-month low in April, with 54,844 homes repossessed in May.

“That the May numbers were up the month after that settlement was completed is an indication that lenders are more confident that there are clear ground rules to foreclose now, so they can play by the rules,” said Daren Blomquist, RealtyTrac's vice president.

“The banks are getting to a place where they consider their foreclosure processing issues resolved, so they're confident enough to go ahead and push through more foreclosures,” Blomquist said.

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In this Nov. 8, 2010 file photo, a foreclosure sign is seen in front of a bank-owned home for sale in Las Vegas, Nevada. Overall foreclosure activity affected 205,990 properties in May, a 9.1-percent increase from April this year. The figure was 4.2 percent lower, however, than in May 2011, RealtyTrac said in a monthly report.(AFP)



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