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Foreclosures Up as Banks Clear Inventory

Foreclosure filings rose in L.A. County and the state in April, mirroring a nationwide trend spurred by banks seeking to sell repossessed properties amid a rise in home prices, according to a report released Thursday. The county filings – which include default notices, repossessions and scheduled auctions – were up 11 percent from the previous month and 15 percent from a year earlier, according to RealtyTrac, an Irvine real estate data provider. In California, they were up 5.5 percent since March and 1.6 percent over April 2014. Distressed housing sales typically are detrimental to a market, but with inventory low in many cities, the decision to unload the properties could actually stimulate sales, said Daren Blomquist, vice president at RealtyTrac, in a prepared statement. “Banks are liquidating these distressed properties in a seller’s market with a low supply of inventory for sale, which should help them sell quickly and at a price that is relatively close to full market value,” he said. The report found that distressed properties sold by banks were, on average, closing at 100 percent of their assessed value in California, compared to 87 percent nationwide. Nationwide, foreclosure filings were reported on 125,875 properties in April, up 3 percent from the previous month and up 9 percent from a year ago. One in every 1,049 housing units was in foreclosure during the month, an 18-month high. The report also noted that initial foreclosure starts are at pre-recession levels, indicating April’s surge in sales amounted to more of a “clean up” from the housing crisis, rather than the start of a new one.

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