In August, mortgage lenders started so many home foreclosures that the month-to-month increase was the biggest since August of 2007. For nearly a year the number of foreclosures has been relatively low as lenders have reacted to an explosion of challenges to the legality of their mortgage and foreclosure practices. But this new surge in foreclosure starts may reflect that the lenders think they have worked through these problems.

According to RealtyTrac, mortgage default notices–the first step in the foreclosure process—increased by 33% from July to August.

That increase has to take into consideration that July’s numbers had been relatively low. Not only had the number of foreclosure filings come down modestly—by 4%–from the prior month. They were also down significantly—by 18%–from a year earlier. In fact, July 2011 had the lowest foreclosure activity in 44 months.

Now with this 33% increase in August, the tide seems to be turning. But is it going to turn into a new wave of foreclosures?

That’s impossible to tell. Not only are there countless factors at play here, they shift all the time, reacting to the constantly changing environment.

Just take a look at one of the factors affecting how many foreclosures are filed: the ongoing legal challenges to foreclosures. These challenges are making their way through the court appeals systems. For example, just a couple days ago the Supreme Court of Alabama ruled that the embattled MERS (Mortgage Electronic Registration Systems) has standing to foreclose. That ruling will presumably open the foreclosure spigots in Alabama, because some lenders undoubtedly had held off on foreclosing while awaiting that ruling. Similar dynamics are at play in just about every state.

This means is that foreclosure trends can be very much a local and dynamic affair. This means you need local advice. Day in and day out I constantly deal with mortgage lenders, and help local homeowners make good decisions about their homes. Give me a call so that I can help you, too.

Foreclosure concentration by stateForeclosure activity is much slower this year than last.

According to foreclosure-tracking firm RealtyTrac, the number of national foreclosure filings plunged 35 percent in March 2011 as compared to March 2010, a statistic that reflects a more healthy housing market and more robust outlook for 2011.

A “Foreclosure filing” is defined as any of the following : a default notice, a scheduled auction, or a bank repossessions. Foreclosures filings were down in all but 8 states last month.

Activity remains concentrated, too. More than half of all bank repossessions can be tied to just a handful of states.

In March, 6 states accounted for 51% of activity.

  1. California : 15% of all repossessions
  2. Florida : 9% of all repossessions
  3. Arizona : 7% of all repossessions
  4. Michigan : 7% of all repossessions
  5. Texas : 6% of all repossessions
  6. Nevada : 5% of all repossessions

At the other end of the spectrum is Vermont. With just 5 repossessions for all of March, Vermont accounted for 0.008% of repossessions nationwide.

Distressed homes remain in high demand among today’s home buyers, accounting for almost 40% of all home resales. It’s no wonder, either. Distresses home typically sell at a steep, 15 percent discount as compared to non-distressed properties.

Buying foreclosures can be a great “deal”. However, make sure you’ve done your homework.

Buying homes from banks is different from buying a homes from “people”. Contracts and negotiations are different, and homes are often sold with defects.

If you plan to buy a Sacramento foreclosure, therefore, make you you speak with a licensed real estate professional before submitting a bid. You can research a home online and learn a lot of the process, but when it’s time to purchase, put an experienced agent on your side.