Foreclosure Surge | Marshfield Real Estate

Alex Veiga, The Patriot Ledger, March 16th, 2012
Foreclosure activity surged last month across about half of the nation?s states, as banks tackled a backlog of homes with mortgages that had gone unpaid yet remained in limbo due to delays stemming from foreclosure-abuse claims.
The increase occurred across 26 states where the courts supervised the foreclosure process. In contrast, the 24 states where the courts do not play a role in the process saw activity decline in February, foreclosure listing firm RealtyTrac Inc. said Thursday.
While uneven, the pace of foreclosures is accelerating following a $25 billion settlement reached last month between the nation?s biggest mortgage lenders and state officials.? The settlement was over the industry?s alleged foreclosure abuses.
Many banks temoporarily put foreclosures on hold in the fall of 2010 after claims surfaced that lenders and mortgage servicers were procesing foreclosures without verifying documents.? As a result, many homes that would have normally ended up foreclosed were left in a procedural limbo, particularly in states where courts play a role in the process.
But that logjam has begun to ease, and banks are moving to sort out their roster of problem mortgages.
?We?re not just seeing an increase in properties starting the foreclosure process, as we have in previous months, but we?re starting to see dramatic increases in properties completing the foreclosure process in many of those judicial foreclosure states,?? said Daren Blomquist, a vice president at RealtyTrac.
That means potrntially more foreclosed homes hitting the market this year that could draw down the value of neighboring homes.
Among states with a judicial foreclosure process, foreclosure activity rose 2% last month from January, and climbed 24% from February last year, the firm said.
Foreclosure activity across states without a court-supervised process fell 5% in February from the previous month and declined 23% from a year earlier.
RealtyTrac bases foreclosure activity on filings that signal when a home is in some stage of the foreclosure process:? an initial default notice, a scheduled home auction or a home repossession, which is when a property goes back to the lender.
Overall, U.S. foreclosure activity dipped 2% from January and was down 8% from February last year.
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