Recent declines in foreclosures are only partly seasonal in nature, but primarily a reflection of greater scrutiny following the robo-signing scandal. While Treasury head Geithner cautioned that a foreclosure ban would further erode prices, Nevada is headed for 4 consecutive years as the nation’s foreclosure capital. See the following article from Property Wire for more on this.
Property foreclosures in the US fell to 21% in November from the previous month as lenders continued to review procedures for more signs of documentation problems, according to a new report.
The latest figures from tracking firm RealtyTrac show that there were 262,339 filings last month which was also down 14% from a year ago. For the first time since February 2009, filings slipped below 300,000. One in every 492 homes received either a default notice, scheduled auction or a bank repossession.
‘While part of the decrease can be attributed to a seasonal drop of 7% to 10% that typically occurs in November, fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork,’ said James Saccacio, chief executive officer of RealtyTrac.
Early December data show artificially low numbers as well, and RealtyTrac expects the delayed foreclosures from the robo-signing scandal to keep filings down until the first quarter of 2011, which only adds to the shadow inventory.
‘Even with this big drop in November we do have a continuing building inventory of properties in foreclosure or REO. We’re estimating those properties plus delinquencies to equal 3 million to 4 million homes waiting to hit the market,’ explained said Daren Blomquist, managing editor of the RealtyTrac reports.
Nevada posted the nation’s highest foreclosure rate for the 47th straight month despite a 20% decrease in November. One in every 99 Nevada homes received a filing in November, nearly five times the national average.
Because foreclosure activity took such a drastic downturn, Utah leapfrogged Arizona, Florida, California and Michigan for the second highest foreclosure rate in the country. There, one in every 221 homes received a filing.
Last week Treasury Department Secretary Timothy Geithner warned the Congressional Oversight Panel that a national foreclosure moratorium in the wake of the robo-signing scandal would hurt property prices.
Geithner said the Treasury’s policy has always been that banks not foreclose until they are ‘certain of their ability to do so on a legal basis’, but he scorned any consideration of a full scale moratorium.
‘As demand for housing slows, people will be unwilling to buy and people sitting in their neighborhoods will see prices drop further because the market sees a much longer time of recovery,’ Geithner said.
The nation’s largest mortgage servicers froze foreclosures in October when employees and attorneys were found signing affidavits en masse and without a proper review of documentation. At the time, many called for a national moratorium for all lenders. No such mandate ever came down, and those servicers have since restarted foreclosures as they’ve changed procedures and resubmitted faulty affidavits.
He added that extending the benefits of such benefits was not necessarily a good use of tax payer’s money.
Geithner did say the damage of the housing crisis is still ‘profound and tragic’ and that much work remains to be done. ‘One thing governments have learned in dealing with these crises is you have to keep at it. You have to keep working on it. You cannot stop working on it too early,’ Geithner said.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.