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Thu Feb 14, 2013, 12:43 PM

Foreclosure Activity Drops Sharply Thanks to New California Law [View all]

Source: Mortgage News Daily

Foreclosure activity in much of the nation now appears to be accelerating downward, dropping 7 percent in a single month according to RealtyTrac. Foreclosure filings nationwide - default notices, scheduled auctions, and bank repossessions - numbered 150,864 or one in every 869 U.S. housing units in January compared to 162,511 in December. This was a 28.5 percent decrease from January 2012.

Foreclosure starts were down 11 percent from December and 28 percent compared to a year earlier and at the lowest level since June 2006. Bank repossessions or REO dropped 5 percent from the previous month and were down 24 percent from January 2012 to the lowest level since February 2008.

While overall activity was down in most states, the size of the national decline can be traced to California where a new law caused a 39.5 percent decrease in filings from December to January making it the first time since January 2007 that California did not have the largest number of filings in the country. RealtyTrac Vice President Daren Blomquist said the new legislation that became effective on January 1 profoundly altered the U.S. foreclosure landscape. "Dubbed the Homeowners Bill of Rights, this legislation extends many of the principles in the national mortgage settlement - including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure - to all mortgage servicers operating in California. In addition the new law imposes fines of up to $7,500 per loan for filing of multiple unverified foreclosure documents. As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation's foreclosure activity.

Scheduled foreclosure auctions increased from the previous month in 26 states and the District of Columbia, hitting 12-month or more highs in several key judicial foreclosure states, including Florida, Illinois, Pennsylvania, and New Jersey, although foreclosure starts were down on a year-over-year basis in Florida, Illinois and Pennsylvania.

Read more: http://www.mortgagenewsdaily.com/02142013_realty_trac_foreclosures.asp

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