Now that bans on foreclosures sales are being lifted, servicers can get back to work on the backlog, fueling hopes that the worst of the US mortgage foreclosure crisis is behind us. Meanwhile, local authorities are increasingly holding lenders and buyers responsible for foreclosure clean up costs as languishing properties become untended eyesores. See the following article from Property Wire for more on this.
The Number of mortgages in the US in foreclosure may have peaked at just over 2 million, according to the National Association of Realtors.
Using figures from the Mortgage Brokers Association and New York based Haver Analytics, NAR says there was a peak in the autumn of 2009 but servicers have worked through the backlog, either modifying the mortgage or selling the underlying home as an REO since then.
According to NAR, the peak of more than 800,000 foreclosures in the South of the country outnumbers the inventory of the Northeast nearly four to one, and leads all regions. The South led with more than 200,000 mortgages that started the foreclosure process as of the first quarter of 2010. That was followed by the West with roughly 180,000, and the Midwest with nearly 110,000. The Northeast has less than 80,000 foreclosure starts as of the first quarter.
Not everyone agrees. Figures from Lender Processing Services show that 263,000 loans entered the foreclosure process in October, which is down 4.4% from the previous month. But LPS said that total foreclosure inventory is 2.1 million with another 2.2 million more that are 90 days delinquent but not yet in the process.
There are also various moves taking place to take the burden of paying for the clean up of empty foreclosed properties away from the tax payer as costs rise. In Madison, Richmond, the county is trying to get the courts to agree that mortgage lenders of foreclosed properties should be forced to pay for their clean up.
County Codes Enforcement Administrator Duane Curry said the county had paid $40,000 over the past two years to clean up foreclosed properties where trash, such as furniture and appliances, had piled up.
The county has filed a lien against offending properties, and if they are purchased, the purchaser would pay cleanup costs. But only $5,000 has been recovered by that method so far.
It is likely to be a growing problem. The average borrower in foreclosure has been stuck in the default pipeline for more than 16 months without making any sort of payment, according to LPS.
Meanwhile Fannie Mae and Freddie Mac have given real estate agents the green light to resume selling foreclosed homes, after suspending the process. The mortgage giants had initially enacted a moratorium on sales of foreclosed properties because servicers were allegedly signing affidavits either without prior knowledge of the case or without a notary present.
It means that sales of foreclosed properties are likely to get back to normal as many other lenders, including Ally Financial, JP Morgan Chase and Bank of that has also issued foreclosure moratoriums have also lifted them.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.