Tracking Firm Reports Foreclosures Down in 2011 – But Not Really
RealtyTrac, the largest firm tracking and addressing the market for foreclosed and otherwise distressed real estate, reported that foreclosures in 2001 dropped 34% from the number foreclosed in 2010.
But the firm also warned that the dip represented more of a blip in the trend than the housing market's return to health.
The sources of the blip were the scandals over shoddy paperwork and allegedly improper foreclosure proceedings that generated settlements between major mortgage servicers and state attorneys general, the company said.
“Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” said Brandon Moore, CEO of RealtyTrac. “The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages — particularly in states with a judicial foreclosure process.
“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”