Mortgages

New Legislation Key to Drop in Foreclosure Starts

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The new year saw a substantial improvement to the country’s housing market, as the number of foreclosure starts nationwide dipped markedly from a month and year earlier.

More than 150,000 filings were recorded during January, according to RealtyTrac’s Foreclosure Market Report, which was 7 percent less than the figure seen in December and nearly 30 percent below the number from January 2012. The total for the month was the lowest in roughly six and a half years. These starts include default notices, scheduled auctions and bank repossessions.

One key reason for the monthly and annual decline in distressed filing activity was a new bill that was approved in the state arguably most affected by the housing crisis in the past handful of years: California.

“The U.S. foreclosure landscape in January was profoundly altered by the effects of new legislation that took effect in California on the first of the year,” said RealtyTrac Vice President Daren Blomquist. “Dubbed the Homeowners Bill of Rights, this legislation extends many of the principles in the national mortgage settlement – including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure – to all mortgage servicers operating in California.”

Florida took over the reins from the Golden State in terms of seeing the highest amount of foreclosures during the first month of 2013, the report noted. Other states hit hard by distressed filings in recent years, Nevada and Illinois, still posted high amounts of foreclosure activity as well.

Regarding the top 10 markets nationally with the highest amount of foreclosures during January, cities in Florida accounted for six of them, including major metros Miami, Orlando and Tampa.

While these states have shown some recovery, it is California that has seen one of the biggest resurgence in terms of real estate in the last year. And according to a report in the Los Angeles Times, experts believe the state will continue to see positive conditions as 2013 progresses.

Esmael Adibi, director of Chapman University’s A. Gary Anderson Center for Economic Research, told the newspaper he thinks the recovery should last.

Image: iStockphoto

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