Fixed mortgage rates fell to their lowest levels in 20 months this week, with the average on 30-year fixed-rate mortgages dropping to 3.63 percent, according to today's weekly rate report...
Banks Tackle Foreclosure Backlog
Newly initiated foreclosures jumped by one-third in August, a sign that banks may be stepping up efforts to clear out a backlog of seriously delinquent mortgages.
Default notices, the first stage of the foreclosure process, were served on nearly 79,000 residential properties in August, according to the foreclosure data firm RealtyTrac, up 33 percent from July. That's the most foreclosures begun in nine months, but still represents an 18 percent annual decline from August 2010.
Other types of foreclosure actions were down for the month, with scheduled foreclosure auctions decreasing 1 percent and bank repossessions down 4 percent from July's levels. The 65,000 bank repossessions reported in August was a six-month low and is down 37 percent from their peak level of 102,000 in September 2010.
Repossessions to increase soon?
"The big increase in new foreclosure actions may bea signal that lenders are starting to push through some of the foreclosuresdelayed by robo-signing and other documentation problems," said James Saccacio,chief executive officer of RealtyTrac. "It also foreshadows more bankrepossessions in the coming months as these new foreclosures make their waythrough the process."
The boost in defaults boosted the total for foreclosure filings of all types by 7 percent for the month.
Banks have been struggling to foreclose on a massive backlog of seriously delinquent mortgages generated by the collapse of the housing market and subsequent economic downturn. Some homeowners remain in their homes despite having not made a mortgage payment in more than one or two years.
Their efforts suffered a setback last fall when it was revealed that some had been cutting legal corners in their efforts to hurry the process along, resulting in what became known as the rob-signing scandal. Banks implemented more stringent procedures as a result, but it slowed the process down.
Foreclosures concentrated in five states
Five states continue to account for over half of all U.S. foreclosure activity, with California, Florida, Michigan, Illinois and Georgia totaling 53 percent of all foreclosure actions in August. Meanwhile, Nevada continued to have the nation's highest foreclosure rate, a position it has held for nearly five years, with one home in every 118 subjected to a foreclosure filing during the month.
Foreclosure filings in the RealtyTrac survey are defined as notices of default, scheduled foreclosure auctions and bank repossessions. The numbers do not include properties that are already in the foreclosure process but did not advance to a further stage during the month.
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