Photo: Flickr via suckamc
Today’s U.S. foreclosure market report from RealtyTrac showed a major uptick in foreclosure activity in nearly half the country.This could mean bad news for millions of Americans who’ve been enjoying something of a paid stay-cation amidst record-long foreclosure review periods.
As we’ve previously reported, a staggering 40 per cent of homeowners in default on their mortgages have waited as many as two years for banks to slog through the foreclosure process.
A lot of that had to do with the fact that a handful of the country’s largest lenders were wrapped up in a massive robo-signing class action suit. Now that the suit’s finally been settled, consumers should expect foreclosures to start revving up big time.
“February’s numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed,” said Brandon Moore, CEO of RealtyTrac. “The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures.”
As Moore points out, states with the biggest spikes in foreclosures last month were finally getting around to clearing a massive backlog of cases as old as 18 months.
According to the report, the 26 states that have a fine-tuned foreclosure process in place saw a 2 per cent increase in foreclosure activity in January and a 24 per cent jump from the same month a year ago. States without a judicial foreclosure process saw declines of 5 per cent from January and a 23 per cent drop from the same period last year.
Under the $25 billion mortgage settlement, $1.5 billion will be returned to about 750,000 homeowners. Banks also agreed help modify more loans and allow some underwater borrowers (those who owe more than their homes are worth) to refinance at today’s interest rates.