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Tuesday, Sep 26, 2017
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Some states saw spike in foreclosures in February

LOS ANGELES - Foreclosure activity surged last month across about half of the nation's states, including Florida, as banks tackled a backlog of homes with mortgages that had gone unpaid yet remained in limbo because of delays stemming from foreclosure-abuse claims. The increase occurred across 26 states where the courts supervise the foreclosure process. In contrast, the 24 states where the courts do not play a role in the process saw activity decline in February, foreclosure listing firm RealtyTrac Inc. reported Thursday. While uneven, the pace of foreclosures is accelerating after a $25 billion settlement reached last month between the nation's biggest mortgage lenders and state officials. The settlement was over the industry's alleged foreclosure abuses. Major banks temporarily put foreclosures on hold in the fall of 2010 after claims surfaced that lenders and mortgage servicers were processing foreclosures without verifying documents. As a result, many homes that would have normally ended up foreclosed were left in a procedural limbo, particularly in states where courts play a role in the process.
But that logjam has begun to ease, and banks are moving to sort out their roster of problem mortgages. "We're not just seeing an increase in properties starting the foreclosure process, as we have in previous months, but we're starting to see dramatic increases in properties completing the foreclosure process in many of those judicial foreclosure states," said Daren Blomquist, a vice president at RealtyTrac. That means potentially more foreclosed homes hitting the market this year that could drag down the value of neighboring homes. Overall, U.S. foreclosure activity dipped 2 percent from January and was down 8 percent from February 2011. But foreclosures are up significantly in Florida and other states. Default notices, the first step in the foreclosure process, edged up 1 percent nationally last month from January but fell 7 percent on an annual basis. Several states posted big annual increases, including Hawaii (321 percent), Maryland (157 percent) and Florida (33 percent) — all three states where courts play a role in foreclosures. Banks repossessed 63,834 U.S. homes last month, down 4 percent from January and a decline of 1 percent from February 2011, RealtyTrac said. But repossessions skyrocketed in February compared with a year ago in Massachusetts (114 percent), North Carolina (95 percent), Florida (90 percent) and Georgia (76 percent), among other states. "At the end of the day in 2012, we are going to see an increase in foreclosures nationally from 2011," Blomquist said. RealtyTrac projects that foreclosures will rise 25 percent this year to more than 1 million homes. Last year, lenders took back 804,000 homes. More than 6 million homeowners were either behind on their mortgage payments or in foreclosure at the end of last year, by some estimates. And roughly a quarter of all U.S. homeowners, about 11 million, are underwater on their homes, owing more on their mortgages than their homes are worth, according to CoreLogic, a real estate data firm.
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