Pending sales of existing U.S. homes unexpectedly surged in October, data from a real estate trade group showed on Thursday, despite concerns that problems in the foreclosure process might curtail activity.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in October, jumped 10.4 percent to 89.3 from 80.9 in September.

Economists polled by Reuters ahead of the report had expected a decline of 0.5 percent.

The index remains 20.5 percent below a cyclical peak of 112.4 notched in October 2009, when a government tax credit lured first-time home buyers.

It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels, Lawrence Yun, the NAR's chief economist, said in a statement.

Several major U.S. mortgage lenders temporarily halted foreclosures in October 2010 as attorneys general in all 50 states investigated whether banks had submitted faulty paperwork to back evictions.

(Editing by Padraic Cassidy)

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