(Reuters) - U.S. foreclosure starts rose year-over-year in June for the second consecutive month, as banks continued to clear their backlog of inventory after a nationwide mortgage abuse settlement, data firm RealtyTrac said on Thursday. Major banks across the country kept moving on distressed properties following a $25 billion mortgage abuse settlement this April, causing foreclosure starts to rise in the second quarter for the first time since the last quarter of 2009.
Overall foreclosure activity, which includes default notices, scheduled auctions and bank repossessions, declined for the 21st straight month, affecting 197,834 properties in June. That was a 3.96 percent decrease from May and an 11.18 decrease from June 2011. The settlement between major banks and state attorneys general, formally approved in April, had been expected to jump-start foreclosure proceedings that had stalled over concerns about liability. New foreclosure starts were filed on 104,294 properties in June, an increase of 4 percent from June 2011 but a 4 percent decrease from May, when they jumped to 109,051 on the heels of the settlement. California's year-over-year foreclosure starts rose by 18 percent in June, giving it the nation's highest foreclosure rate for the first time since RealtyTrac began its monthly reporting in January 2005. The midyear report showed 1,045,801 total properties with foreclosure filings for the first half of 2012, an increase of 2 percent from the previous six months, but a decrease of 11 percent from the first half of 2011. The average length of the foreclosure process rose to 378 days in the second quarter, up from 370 in the first quarter and the highest quarterly average since the first quarter of 2007. RealtyTrac collects data from more than 2,200 counties nationwide, which account for more than 90 percent of the U.S. population.