After a reprieve in 2011, and a key reason why prognostications of a US housing market bottom is misguided, RealtyTrac reported that foreclosure filings were up 3% in January, month-over-month. Notice of defaults, however, are still depressed, down 22% from a year ago and unchanged from the prior month.
The 3% is statistically insignificant and I am not being an alarmist, but it represents the beginning of the distressed sale ramp-up now that the mortgage servicing settlement has finally been hammered out (actually the increase occurred before the agreement was final).
Daren Blomquist with RealtyTrac said increased foreclosure activity in key judicial foreclosure states is the likely result of lenders gaining some certainty over foreclosure processing issues, court decisions and regulations impacting the default process. He also points to the $25 billion mortgage servicing settlement that financial firms reached with state attorneys general over robo-signing and foreclosure issues.
On the surface, filings are still 19% below year ago levels, but the year ago level was artificially low just after the “robo-signing” scandal at the end of 2010.
“It’s a bit surprising that we are seeing this increase in January before the settlement was even announced,” Blomquist said. “It may be that lenders were ramping up (foreclosure activity) with the expectation of the settlement happening.”
RealtyTrac reports foreclosure filings rise 3% in January [Housingwire]
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.