Foreclosure Activity Declines While Lenders Re-Examine Legal Procedures
Foreclosure activity has declined to its lowest level in 3 years while mortgage servicers continue to tackle the problems on their legal procedures. This was reported by RealtyTrac Wednesday.
James J. Saccacio, the chief executive officer of RealtyTrac, a California firm that tracks the foreclosure market, said, “The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.” He also added, “We expect to see the numbers bounce back, but that will likely take several months.”
In New Jersey, foreclosure activity was down 50%, while nationally, it was down 27% compared to the same period last year. Foreclosures have been suspended while lenders handle the fallout from “robo-signing” allegations. “Robo-signing” is the term given to the actions of bank employees who sign affidavits, as well as other legal documents without first verifying them.
New Jersey Chief Justice, Stuart Rabner, in December ordered six big lenders to show why their foreclosure actions should not be stopped in light of the allegations on robo-signing. The six lenders, JP Morgan Chase, Bank of America, Ally Financial, Citibank, Onewest Bank and Wells Fargo, are due to appear in court in Trenton later this month.
A few years ago, mortgage delinquencies started to increase as less-qualified homeowners started to default on the exotic subprime mortgages that were written during the time of the housing boom.
The biggest problem in recent times was among previously qualified buyers who fell behind their mortgage payments because they lost their jobs as unemployment breached the 9% level.
According to RealtyTrac, the highest foreclosure rates in the month of February were in California, Nevada and Arizona.