Foreclosure activity down in 2011 but expected to rise in 2012
This article first appeared in the St. Louis Beacon, Jan. 12, 2012 - Foreclosure filings in 2011 dropped significantly due to a "dysfunctional" process -- and not because the U.S. housing market is out of the woods, according to numbers compiled by RealtyTrac, an online foreclosure marketing company.
The total number of U.S. foreclosure filings in 2011 was 2,698,967 on just under 1.9 million properties, a decrease of 34 percent in total properties from 2010, according to the Jan. 12 report. Properties with foreclosure filings in 2011 dropped by nearly 31 percent in Missouri and by 32 percent in Illinois over the previous year. Foreclosure filings include default notices, scheduled auctions and bank repossessions.
But Brandon Moore, chief executive of RealtyTrac, quashed any positive thoughts inspired by those numbers and predicts that foreclosure activity will pick up as lenders get their houses in order.
"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," he states in the report. "The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages -- particularly in states with a judicial foreclosure process.''
Moore said there were signs in the second half of 2011 that lenders had started pushing through delayed foreclosures in select local markets.
"We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010," he said.
Foreclosures are also taking longer to complete, according to the report. U.S. properties foreclosed in the fourth quarter of 2011 took an average of 348 days, up from 305 days in the fourth quarter of 2010. The length of the average foreclosure process has increased 24 percent from 281 days in the third quarter of 2010, when the robo-signing controversy forced lenders to re-evaluate their foreclosure procedures.
On the brighter side, the report noted that total U.S. foreclosure activity and the U.S. foreclosure rate in 2011 were both at their lowest annual level since 2007. Foreclosure activity in 2011 was 33 percent below the 2009 total and 19 percent below the 2008 total.
To read the entire report, click here.