Over the holidays, and while policymakers came up with mortgage-modification plans, there was a general lull in foreclosures.
But they’re coming back in a big way. All the major banks, like JPMorgan (JPM), Wells Fargo (WFC) and the GSEs say they’ve been ramping up foreclosures in recent weeks, according to WSJ.
Foreclosure sales had dropped in the second half of 2008 as mortgage companies delayed taking action against delinquent borrowers. But sales have been edging up this year, according to LPS Applied Analytics, which tracks loan performance. Foreclosure-related filings increased by nearly 6% in February from the month earlier, and were up almost 30% from February 2008, according to RealtyTrac. The backlog of seriously delinquent loans has been growing.
In California, notices of trustee sales, which are preludes to foreclosure sales, climbed by more than 80% to 33,178 in March, from February, according to data from ForeclosureRadar.com and the Field Check Group. The increase reflects both the expiration of foreclosure moratoriums and a California law enacted late last year that temporarily delayed default and foreclosure notices, says Mark Hanson, president of the Field Check Group, a research firm.
Now granted, the 80% month-over-month increase is exaggerated since February was artificially low, and in March the banks were making up for lost time. Still, this probably explains some of the “shock” consumer spending drop in March, compared to February and January. Nothing like getting foreclosed on to decisively remind you that your broke.