IBJNews

Foreclosure activity edges higher in January

Back to TopCommentsE-mailPrintBookmark and Share

Banks took back more U.S. homes in January than in the previous month, the latest sign that foreclosures are accelerating after slowing sharply last year while lenders sorted out foreclosure-abuse claims.

Foreclosures rose 8 percent nationally last month from December, but were down 15 percent from a year earlier, foreclosure listing firm RealtyTrac Inc. said Thursday.

Despite the annual decrease at the national level, some states posted sharp increases compared to January 2011. In Indiana, foreclosures jumped 69 percent. They increased 75 percent in Massachusetts and 62 percent in New Hampshire.

Indiana had the 10th highest foreclosure rate in the nation in January with one foreclosure for every 555 properties. Foreclosures were filed on 5,039 properties in the state. Nevada topped the nation with one foreclosure for every 198 properties.

The foreclosure trend is expected to strengthen this year in light of last week's $25 billion settlement between the nation's biggest mortgage lenders and 49 state attorneys general over the industry's handling of foreclosures.

Many banks and mortgage servicers processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures — a practice dubbed "robo-signing."

Major banks temporarily put foreclosures on hold after the problems surfaced in the fall of 2010. Some had to refile previously filed foreclosure cases and revisit pending cases to prevent errors. Those delays and uncertainty over state and federal probes into the industry's foreclosure practices led to a sharp slowdown in foreclosure activity last year.

The settlement between the banks and state attorneys general helps clarify the rules banks must follow to foreclose on borrowers, said Daren Blomquist, a vice president at RealtyTrac. That will pave the way for more foreclosures, he said.

"The settlement will accelerate the foreclosures that are happening this year and it will accelerate the process of lenders catching up on the backlog of foreclosures that has been building up over the last year and a half," Blomquist said.

Credit rating agency Fitch Ratings also anticipates foreclosures will climb nationally this year, but not right away, noting it will take some time for lenders and mortgage servicers to make sure they are in compliance with the rules set forth in the settlement.

"You probably are going to see the pace pick up as the year goes on," said Grant Bailey, a managing director at Fitch.

RealtyTrac projects foreclosures will rise 25 percent this year to 1 million homes. Last year, lenders took back 804,000 homes.

Even so, the rise in foreclosures isn't expected to be uniform nationwide. That's because the settlement isn't likely to ease the backlog of foreclosure cases in states where courts play a role in the process.

In addition, some states have taken steps to slow lenders down.

Throughout the housing downturn Nevada has had the nation's highest foreclosure rate. There, a law that went into effect in October requires that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.

That has contributed to fewer homes entering the foreclosure process, but also a smaller pool of foreclosed homes available for sale in places like Las Vegas.

There are as many as 3,000 fewer homes listed for sale in the greater Las Vegas market than just a year ago, said Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev.

That's made multiple offers on foreclosures and other properties priced up to $250,000 commonplace, she said.

"There are tons of homes sitting out here vacant that people haven't paid on for two years, or whatever the case, that should be in the foreclosure pipeline and are not yet," Herwick said.

Foreclosure activity in Nevada fell 8 percent last month from December, but was down 52 percent from January last year, RealtyTrac said.

High unemployment, a sluggish housing market and falling home values remain major factors in homeowners falling behind on their mortgage payments. Many borrowers also have simply stopped paying their mortgage because they owe more on the mortgage than the home is worth.

All told, 210,941 U.S. homes received a default notice, were scheduled for auction or were repossessed by a lender in January, RealtyTrac said.

That's up 3 percent from December, but a drop of 19 percent from January last year. The foreclosure rate translates to one in every 624 U.S. households.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

ADVERTISEMENT