BOSTON – U.S. lenders started foreclosures on more properties in the third quarter, the first increase in a year, as a backlog stemming from claims of faulty home seizures began to ease.

New foreclosures rose to 1.08 percent of all loans from 0.96 percent in the prior three months, according to a report Thursday from the Mortgage Bankers Association in Washington. The rate had been falling since the third quarter of 2010, when regulators began investigating “robo-signing,” the practice of pushing through unverified paperwork.

Several of the nation’s largest banks called a temporary halt to foreclosures at the end of last year while they addressed claims of flaws in their court documents. The moratoriums clogged the entire foreclosure pipeline as banks investigated their procedures, said Patrick Newport, an economist at IHS Global Insight in Lexington, Mass.

“Banks are starting to speed up the process now that they’ve cleaned up their paperwork,” Newport said in a telephone interview. “We’re seeing the backlog begin to move.”

Notices of default, the first step of the foreclosure process, fell every month from September 2010, when the claims first surfaced, to a five-year low in May, according to RealtyTrac Inc., a mortgage-data firm in Irvine, Calif.

Accelerating economic growth during the third quarter may have helped households to pay their bills on time. The delinquency rate that measures late mortgage payments for all U.S. home loans fell to 7.99 percent from 8.44 percent in the prior period, according to the banker association’s report.

The U.S. economy expanded at a 2.5 percent pace in the three months ended in September, faster than the second quarter’s 1.3 percent rate

“While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet and that the issues continue to vary by geography,” Michael Fratantoni, the banker association’s vice president of research and economics, said in a written statement.

Foreclosure starts in the third quarter were highest in Nevada at 2.48 percent of homes, followed by Florida at 1.96 percent, Arizona at 1.67 percent and Rhode Island at 1.66 percent, according to the group’s report. California, the nation’s largest state, was No. 5 at 1.45 percent.

Measuring all loans in foreclosure, Florida led the nation at 14.5 percent. New Jersey was next at 8.08 percent, followed by Nevada at 7.89 percent and Illinois at 7.29 percent. New York was No. 6 at 5.67 percent.

 

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