LOS ANGELES (AP) -- The number of U.S. homes receiving a foreclosure-related notice fell to a 36-month low last month, as lenders delayed taking action against homeowners amid heightened scrutiny over banks' handling of home repossessions.
Some 255,101 properties received at least one of the notices in February, down 14 percent from January and 27 percent versus the same month last year, foreclosure listing firm RealtyTrac Inc. said Thursday.
The firm tracks notices for defaults, scheduled home auctions and home repossessions -- warnings that can lead up to a home eventually being lost to foreclosure.
While severe winter weather was likely a contributing factor, the sharp drop-off was primarily due to lenders taking a more measured approach to their foreclosure processes since the industry came under fire last year.
State and federal officials launched investigations last fall into foreclosure procedures used by mortgage servicers and lenders after evidence surfaced that some major banks pushed through hundreds of foreclosures a day without giving many borrowers a fair shot at keeping their homes.
Several large banks, including Bank of America, Citigroup and JPMorgan Chase, have been in talks to settle a probe launched by 50 state attorneys general over their handling of foreclosures.
Many lenders temporarily froze foreclosures last October while they reviewed and, in some cases, re-filed foreclosure documents. That process has continued this year, but in less-than-speedy fashion due to backed-up court dockets and other procedural road bumps.
Initial default notices fell 16 percent from January and 41 percent from a year ago, while scheduled foreclosure auctions declined 10 percent versus last month and 21 percent from February last year, RealtyTrac said.
Meanwhile, lenders repossessed 64,643 homes last month, down 17 percent from January and 18 percent from the same month last year. Repossessions declined 35 percent in states where courts play a role in the foreclosures process.
The decline in foreclosure notices has slowed not only the pace of homes lost to foreclosure, but also stemmed the tide of additional properties potentially at risk for repossession.
That's good news for homeowners in trouble, but it's unlikely to portend fewer foreclosures in the long-run.
"The issue isn't whether we'll see the repossessions -- it's when," says Rick Sharga, a senior vice president at RealtyTrac.
Published: Fri, Mar 11, 2011
