Final Foreclosures Fall as Pipeline Swells

The number of new foreclosures in 2011 dropped nearly 40 percent, according to year-end numbers just released by Lender Processing Services; there is, however, little cause for celebration.

The fall is largely due to moratoria and process reviews stemming from the so-called “robo-signing” foreclosure paperwork scandal.

Mortgage delinquency rates were largely unchanged from last year, which means all that distress will be pushed forward to 2012 and beyond.

To give you an idea of just how much the “robo” scandal is toying with the numbers, LPS compared states that require foreclosures to go through the courts versus states that don’t (judicial versus non-judicial) and found the following:

- 50 percent of loans in foreclosure in judicial states have not made a payment in two years, as opposed to 28 percent in non-judicial states.

- Foreclosure sale rates in non-judicial states are about four times those in judicial states.

"Nationally, foreclosure pipelines remain at historic highs, but they are clearing at very different rates depending upon state procedures," says Herb Blecher of LPS Applied Analytics.

With the nation essentially split between judicial and non-judicial foreclosure states, it’s safe to say the foreclosure crisis will linger longer than anyone expected, especially with negotiations for a settlement between big banks and state attorneys general hitting yet another roadblock.

California Attorney General Kamala Harris rejected the latest proposal this week, calling it inadequate.

“Our state has been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners, and meaningful enforcement that ensures accountability. At this point, this deal does not suffice for California,” she wrote in a statement.

Bank sources say that without California the value of the settlement would drop by billions and banks would still have major liability for foreclosure fraud. About one fifth of the nation's foreclosures are in California.

Bookmarks:

Please provide us with your opinion on this article: Your name: Comment:  Please register or login

Shotiko Something must be done to help the hard-working, used to be middle-class, ceiztins to keep theirhomes. Please pass this bill and help the littlepeople in this country who have followed the laws,paid their taxes, and families have served their country U.S.A. ceiztins. read more... 10/01/2012 Lynsey Wowza, problem soveld like it never happened. read more... 05/04/2012 Thasni You don't give enough inotmrafion. How old are these debts? Are they even worth trying to settle? Paying collections do NOT help your credit score one single solitary bit. So if past Statute of Limitations there is no sense to pay and if there isn't a threat of suing, you shouldn't be opening any doors. Assuming you already have looked at those things and you KNOW settlements are the option, sure you can say that. Remember if the accounts have been charged off and are with collectors, they paid pennies on the dollars. If they think they have you scared, they will push the issue. If they know they can sue.. they will be harder to settle with so you can play hardball to. Write back and simply say this is an impossible offer. I offered the best deal that we can possibly make.. if you fail to accept this offer, please cease all communication. If you pursue this in court, we will be prepared with all financial inotmrafion to show the judge what we are able to afford. You are then telling them you know you can show up at court, the judge does have say in payments etc. BUT again.. take a step back and make sure you even need to settle this. Way too many people work hard on settling debt that is not even legally collectible. read more... 05/02/2012 Read all comments: 3