Foreclosures Drop in 84 Percent of U.S. Metro Areas

July 27th, 2011 Brock Hailes Leave a comment Go to comments

A new report from RealtyTrac revealed that foreclosures declined in more than 84 percent of U.S. metro areas during the first half of the year. However, as RealtyTrac has repeated numerous times over the past year, the drop in foreclosures does not necessarily mean the housing market as a whole is turning around.

Foreclosure Pipeline Still Clogged

While the number of foreclosure procedures initiated dropped in 84 percent of U.S. metro areas during the first half of the yearand foreclosures on the whole fell 29 percent over the past 12 monthsRealtyTrac was intent on clarifying that the improved numbers by no means represent a recovering housing market.

Instead, the company reiterated that foreclosure processes have merely been slowed by mortgage servicers who were forced to evaluate their procedures after the robo-signing scandal of last year proved they were using illegal practices to forcibly evict borrowers.

This is evidenced by the fact that the biggest decline in the number of foreclosures was found in states where defaults are forced to filter through courts and are therefore, going to be scrutinized more by judges.

Robo-Signing Still Occurring

Despite the problems the robo-signing scandal of last year created for the housing marketand promises from mortgage servicers that the illegal practice would stopcounty officials from several states revealed the practice is still going strong.

Last week, lawmakers called for hearings to address the news that servicers have continued robo-signing documents (generating falsified foreclosure documents instead of providing sworn affidavits required by law) to illegally foreclose homeowners.

Servicers had already been reprimanded for their behavior and have even been required to pay penalties and provide borrowers with loan modifications. However, lawmakers feel the punishments have not been severe enough.

Rep. Maxine Waters (D-Calif.) announced that lenders not only need to be investigated and prosecuted, but regulators need to step in stop the action since lenders have complete disregard for the damage they have already caused and have no intention of changing their ways.

A date for the robo-signing hearings has not been announced, but officials expect it to come in the near future.

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