Evictions Drop, More Foreclosures Expected in 2011

December 20 2010 (Chris Moore)
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Foreclosure activity took a nosedive in November, reflecting both an expected seasonal lull and foreclosure moratoriums that were imposed by several of the major servicers however, that should only be a temporary situation as foreclosures in 2011 are expected to top 2010’s record levels.

RealtyTrac reports that foreclosure filings in November dropped 21 percent vs. filings in October. This is a 14 percent decline from November 2009. A total of 262,339 U.S. properties, one in every 492 housing units, were the subject of a foreclosure filing during the month.

Several servicers stopped foreclosures in early October when they discovered that inappropriate procedures were being used in some states with the judicial form of foreclosure which requires court approval. The problems involved so-called “robo-signing,” the mass processing of required affidavits without check for proper underlying documentation.

Both the 21 percent month-over-month decrease and 14 percent year-over-year decrease in foreclosure activity were the largest drop offs recorded since RealtyTrac began publishing its figures in January 2005.

However, Rick Sharga, a senior vice president at RealtyTrac, stated that next year could very well be a peak year for foreclosures. The market is expected to tally about 1.2 million bank repossessions in 2010, up from 900,000 in 2009, he says. “We expect we will top both of those numbers in 2011.”

Again part of the blame falls in the lap of the “robo-signing” controversy which delayed a portion of foreclosures this year but will be completed in the coming year.

Continued high unemployment also is expected to exacerbate the foreclosure problem in the year ahead, as will upcoming interest-rate resets on adjustable-rate mortgages that will increase monthly payments for some homeowners, Mr. Sharga says.

Tags: foreclosures, foreclosure moratorium, foreclosure filings, mortgage servicers, foreclosure activity, unemployment, adjustable rate mortgages