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IPFS News Link • Housing

Foreclosure-Gate Stymies The Smooth Flow Of Foreclosures

Reed Saxon / AP “Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said James J. Saccacio, chief executive officer of RealtyTrac. “While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures. We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.” To prove the point, in this month's report RealtyTrac broke out the numbers by judicial foreclosure states (where foreclosure documents are filed in court before a judge) and non-judicial foreclosure states; the former are where the banks froze most actions, but they are also slowing the process and going over procedures in non-judicial foreclosure states as well. Notices of default, the first step in the foreclosure process were down 19 percent in judicial states in February and up 13 percent in non-judicial states. Bank repossessions, the final stage, were down 24 percent in judicial states and down 14 percent in non-judicial states. The numbers are even more stark when you look at specific cities.