Foreclosure activity declined 4 per cent in October, according to the latest report from RealtyTrac.
The decline is associated with foreclosure freezes that followed the robo-signing scandal, and it is expected to continue into November.
Unfortunately this isn’t good news for the housing market. Banks had accelerated foreclosure activity over the summer in an effort to clear toxic assets and let the market start to recover. That effort has cratered.
Now mortgages are staying in delinquency longer than ever. Continued decline in home values will push more mortgageholders into delinquency.
Analysts like Chris Whalen have said these bad mortgages will aggravate a financial liquidity ciris in 2011, leading to chaos and disaster.
More from RealtyTrac:
A total of 100,575 U.S. properties received default notices (NOD, LIS) in October, a 2 per cent decrease from the previous month and a 19 per cent decrease from October 2009 — the ninth straight month where default notices have decreased on a year-over-year basis.
Default notices were still up on a monthly basis in several states: Florida LIS were up 2 per cent from the previous month; Ohio LIS were up 10 per cent; and Illinois LIS were up 24 per cent. Meanwhile, NODs decreased on a monthly basis in California (down 9 per cent from the previous month), Nevada (down 17 per cent), and Michigan (down 18 per cent).
Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 138,361 U.S. properties in October, a 3 per cent decrease from the previous month but still a 6 per cent increase from October 2009. Scheduled auctions decreased month-over-month in 26 states and the District of Columbia, while 16 states posted year-over-year decreases in scheduled auctions.
Lenders foreclosed on 93,236 U.S. properties in October, down 9 per cent from the record high in the previous month but still up 21 per cent from October 2009. Bank repossessions (REOs) decreased month-over month in 33 states and the District of Columbia, while 14 states posted year-over-year decreases in REOs. Including October, lenders have foreclosed on an average of more than 91,000 properties each month this year.