Fewer Default Notices in February. Home Repos Restricted

Foreclosure filings of all types continued to decline during February, with 225,101 filings of all types recorded on U.S. properties during the month.  This is a 14 percent decrease from January and is 27 percent lower than the same period a year earlier.

According to RealtyTrac's US Foreclosure Market Report released on Thursday, that year-over-year decrease is the largest recorded by the company since it began keeping records in 2005.  A foreclosure filing was reported on one out of every 577 U.S. housing units.

RealtyTrac bases its reports on a database derived from a nationwide survey of foreclosure filings in three categories:

1. Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
2. Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
3. Real Estate Owned or REO properties : "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.

"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."

The problems associated with foreclosure documentation do not directly impact every step of the process though. There is reason for optimism.   Default notices (NOD LIS) were filed on a total of 63,165 properties in Fenruary, that is a 16 percent decline from January and a 41 percent improvement from a year earlier.  It is also a 48-month low for this category and is 55 percent below the peak in default notices, which occurred in April of 2009.

...(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Source: http://www.mortgagenewsdaily.com/03102011_foreclosures.asp

Foreclosure Homes Realty Market Realty Economy