McHenry County foreclosures were down slightly in October, according to RealtyTrac's Foreclosure Market Report.
A report released Thursday by Irvine, Calif.-based RealtyTrac shows one of every 220 housing units in the county received a foreclosure filing in October 2012, compared to one of every 208 the previous month. Kane County's foreclosure rate was one in every 209 homes. Lake County's rate was one in every 241.
There are 5,514 foreclosure housing units in McHenry County, according to realtytrac.com. That compares to 5,442 foreclosure housing units in September. New foreclosure activity in October showed 86 housing units in Crystal Lake, 25 in Marengo, 50 in Woodstock, 41 in Huntley, 43 in Cary, 40 in Algonquin, 35 in Wonder Lake, 22 in Harvard, 13 in Spring Grove and five in Richmond.
Illinois' home foreclosure rate rose 6 percent in October compared to the previous month and was 19 percent higher than in October of last year.
RealtyTrac shows Illinois with 14,899 foreclosure filings in October. That represents one in every 356 housing units – the third-highest rate in the nation.
Filings include default notices, auction-sale notices and bank repossessions.
Florida had the nation's highest October foreclosure rate — one in every 312 housing units, followed by Nevada with one in every 352 housing units. Also in the top five were Arizona and California.
Nationally, October's foreclosure activity rose 3 percent from last month but fell 19 percent from October of 2011.
Between January and October, 971,533 homes were placed on the path to foreclosure, down 8 percent from the same period last year.
At the other end of the foreclosure process, banks repossessed 559,063 homes through the end of last month, a decline of nearly 19 percent from a year earlier.
That puts lenders on pace to complete 650,000 foreclosures this year, down from 800,000 in 2011, the firm said.
While many states continued to see heightened foreclosure activity last month, the decline at a national level reflects several factors working to stem, or in some cases, merely delay foreclosures.
Home sales are running ahead of last year, lifting home prices in many parts of the country, which can make it easier for homeowners to lower their monthly payments by refinancing.
"Those improving housing conditions are lifting all boats and lifting some people out of foreclosure," said Daren Blomquist, a vice president at RealtyTrac.
Stronger job growth, even as the national unemployment rate remains just below 8 percent, likely has helped some homeowners avoid foreclosure.
The percentage of mortgage-holding homeowners who were at least two months behind on their payments sank in the third quarter to the lowest level in more than three years, according to credit reporting firm TransUnion.
Efforts by federal and state lawmakers to slow down the foreclosure process or make loan modification a more likely option for homeowners also are having an impact.
Lenders also appear to be more amenable to short sales, when the bank agrees to accept less than what the homeowner owes on their mortgage, as a way to avoid foreclosing upon a borrower.
In February, the mortgage industry agreed to pay $25 billion to settle allegations that many banks and mortgage servicers processed foreclosures without verifying documents.
Another instrumental factor in the sharp slowdown in foreclosure activity: The pipeline of risky home loans made before 2008 is shrinking. Loans issued since then, after banks tightened lending standards, are less likely to go unpaid.
"We're past the bulk of the high-risk loans that were most susceptible to foreclosure," Blomquist said.
Even so, there are signs at the state level that more homes could end up in foreclosure in coming months.
The trend is most evident in states such as New York, Florida and New Jersey. In those states, the courts play a role in the foreclosure process, prolonging the time it's taking lenders to tackle their backlog of foreclosure cases.
Fourteen states saw an annual increase in foreclosure activity, which RealtyTrac measures as the number of homes receiving a default notice, scheduled for auction or repossessed by the bank.
Of those, only two — North Carolina and Washington State — are not states where the courts are involved in foreclosures.
The three states with the biggest annual increases in foreclosure activity last month were New Jersey, New York and Connecticut. Foreclosure moratoriums in each state in the aftermath of Superstorm Sandy last month means it will take longer for lenders complete pending foreclosures, Blomquist said.
All told, 89,209 homes entered the foreclosure process in October, up 2 percent from September, but down 19 percent from October last year, RealtyTrac said.
Lenders repossessed 53,478 homes last month, a drop of less than 1 percent from the previous month, down 21 percent from October 2011. Home repossessions have declined on a monthly basis the past 24 months.
– The Associated Press contributed to this report.