Foreclosure filings in May spiked 9% compared with a month earlier, according to an industry group.
RealtyTrac reported that 205,990 U.S. properties received filings last month, including default notices, scheduled auctions and bank repossessions, marking the first monthly increase since January.
Bank repossessions climbed steeply, up 7% to 54,844, after hitting a four-year low in April.
The industry had anticipated that there would be a new wave of foreclosures once the industry resolved the “robo-signing” issues, which came to light in late 2010. A settlement was finalized last April.
Robo-signing put the methods used by the banks to repossess homes under intense scrutiny. That forced lenders to slow the foreclosure process to make sure their paperwork was legal and proper.
Once the banks reached a massive $26 billion settlement with state attorneys general over processing abuses, it was expected that they would step up their foreclosure efforts.
“With the settlement, it makes sense that the lenders would feel more confident pushing delinquencies through to foreclosure in May,” said Daren Blomquist, a spokesman for RealtyTrac.
There was also a 12% jump in foreclosure starts. “The jump in May foreclosure starts shows that it’s going to be a bumpy ride down to the bottom of this foreclosure cycle,” said Brandon Moore, CEO of RealtyTrac.
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