He said the high number of mortgagee sales between January and March 2012 came as a surprise.

There were 524 in total nationwide, more than a 100 more than the same period last year. Before the global financial crisis, there would have been about 35 a month, he said.

“It was a surprise to us that the level was so high. With all the good news about the economy improving, you would expect a return to pre-recession levels.”

And it is the major banks driving the sales.

Three years ago, second-tier lenders were responsible for 55 per cent of mortgagee sales, and the big banks about a third. That had completely reversed, with banks driving more than half of this year's mortgagee sales.

But Donald said that was not a surprise.

At the height of the recession, the downturn was being driven by the collapse in the subprime mortgage market, which typically provided second-tier mortgages.  “It’s a matter of second-tier lenders being cleared through the system. They backed the more risky developments and were the first to start calling loans in.”

He said it was expected the banks would take over as the second-tier lending dried up.  “Increasingly, as you clear out more risky projects, you get back to the ones that the banks are lending to.”

Terralink expected 2012 would surpass 2010’s record number of mortgagee sales.

Small-scale property owners, with one or two properties, were responsible for 5 per cent fewer mortgagee sales compared to the first quarter of last year. 

Those with a large number of properties were responsible for 5 per cent more mortgagee sales.

Donald said that could be because the larger investors had leveraged equity in each of their properties and could feel the pinch if they were revalued and the bank’s lending criteria not met.

In Northland, where the number of forced sales rose 155 per cent, from 20 to 51, real estate agent Glenn Curness said it seemed to be both private homeowners and property investors equally affected.