Mortgages

Foreclosures Up in January, Expected to Grow

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The number of homes that were foreclosed nationwide in the month of January rose slightly from December’s totals, but was still considerably lower than those seen in the same month last year.

The number of foreclosures filed nationwide—including default notices, scheduled auctions and bank repossessions—increased 3 percent to a total of 210,941 properties in January, according to the latest data from the foreclosure monitoring firm RealtyTrac. That equates to one in every 624 housing units. However, that total is 19 percent below those observed in January 2011.

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“Although overall foreclosure activity was down from a year ago for the 16th straight month in January, we continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw,” said Brandon Moore, chief executive officer of RealtyTrac. “Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts.”

The latter point illustrates an area of concern for some, as experts expect foreclosures to continue ticking up in the next several months, the report said. Part of the reason for that is the recent settlement between the nation’s five largest lenders and the attorneys general of 49 states. Many lenders had frozen or severely scaled back foreclosure efforts during the ongoing negotiations, and now that the settlement has been reached, it’s expected that the logjam of backed-up cases will start getting pushed through in the coming months, at least in some cases. At the state level, there are still numerous protections in place that may help to slow filings somewhat.

In all, default notices increased by at least 20 percent on a year-over-year basis in a number of states, but were felt most severely in Pennsylvania and Maryland, where they rose 112 and 100 percent, respectively. Florida (36 percent), Massachusetts (27percent) and Connecticut (23 percent) also saw significant jumps.

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Foreclosure increased significantly during and immediately following the recent recession, though some say this was the result of the robosigning controversy that saw many lenders push through hundreds or more of these filings per week, often improperly. That practice was what led to the massive settlement reached between lenders and states.

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