Alex Veg, Associated press, The Patriot Ledger, February 17th, 2012
Banks took back more U.S. homes in January than in the previous month, the latest sign that foreclosures are accelerating after slowing sharply last year while lenders sorted out foreclosure-abuse claims.
Foreclosures rose 8% nationally last month from December, but were down 15% from a year earlier, foreclosure listing firm RealtyTrac Inc. said Thursday.
Despite the annual decrease at the national level, some states posted sharp increases compared to January 2011. In New Hampshire, foreclosures jumped 62%. In Massachusetts, 75%.
That trend is expected to strengthen this year in light of last weeks’ $25 billion settlement between the nation’s biggest mortgage lenders and 49 state attorneys general over the industry’s handling of foreclosures.
Many banks and mortgage servicers processed foreclosures without verifying documents. Some employees signed papers they hadn’t read or used fake signatures to speed foreclosures — a practice dubbed “robo-signing.”
Major banks temporarily put foreclosures on hold after the problems surfaced in the fall of 2010. Some had to re-file previously filed foreclosure cases and revisit pending cases to prevent errors. Those delays and uncertainty over state and federal probes into the industry’s foreclosure practices led to a sharp slowdown in foreclosure activity last year.
The settlement between the banks and state attorneys general helps clarify the rules banks must follow to foreclose on borrowers, said Daren Blomquist, a vice-president at RealtyTrac. That will pave the way for more foreclosures, he said.
“The settlement will accelerate the foreclosures that are happening this year and it will accelerate the process of lenders catching up or the backlog of foreclosures that have been building up over the last year and a half,” Blomquist said.
RealtyTrac projects foreclosures will rise 25% this year to 1 million homes. Last year, lenders took back 804,000 homes.
Even so, the rise in foreclosures isn’t expected to be uniform nationwide. That’s because the settlement isn’t likely to ease the backlog on foreclosure cases in states where courts play a role in the process.
In addition, some states have taken steps to slow down lenders.
Nevada has had the nation’s highest foreclosure rate. There, a law that went into effect in October requires foreclosure documents to be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.
That has contributed to fewer homes entering the foreclosure process, but also a smaller pool of foreclosed homes available for sale in places like Las Vegas.
There are as many as 3,000 fewer homes listed for sale in the greater Las Vegas market than just a year ago, said Rosa Herwick, a broker and owner of Centrury 21 JR Realty in Henderson, Nev.
“There are tons of homes sitting out here vacant that people haven’t paid on for two years, or whatever the case, that should be in the foreclosure pipeline and are not yet” Herwick said.
Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ….. click LIKE to receive real estate info and what’s happening in Marshfield.
