Foreclosure filings rose for the first time in more than a year in Florida, Indiana, Pennsylvania and Illinois as lenders resumed property seizures after a probe of documentation, according to RealtyTrac Inc.
In Florida, one of the hardest-hit states in the housing crash, notices of default, auction or seizure rose 14 percent in January from a year earlier, to 12,102. They increased 69 percent in Indiana, 24 percent in Pennsylvania and 9 percent in Illinois, RealtyTrac said today. All are so-called judicial states, where courts supervise property seizures and add time to the process.
The gains may continue after U.S. banks agreed Feb. 9 to a $25 billion settlement over abusive foreclosure practices, according to Irvine, California-based RealtyTrac. Across the U.S., a total of 210,941 properties received filings in January, up 3 percent from December and down 19 percent from a year earlier. One in every 624 households got a filing.
“We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement,” RealtyTrac Chief Executive Officer Brandon Moore said in a statement. Even with the surges in judicial states, January was the 16th straight month that filings fell year-over-year, according to the data company.
The agreement with the five largest U.S. mortgage servicers capped more than a year of negotiations with state attorneys general following allegations that the banks used faulty and fraudulent paperwork, or robo-signing, to repossess properties.
Aid to Borrowers
For borrowers, the deal provides $17 billion in debt forgiveness and $3 billion in refinancing to lower homeowners’ interest rates. About $1.5 billion in payments will go to 750,000 people who’ve lost their houses.
Lenders decided to step up foreclosure actions even before the accord was final, accounting for the increase in January filings, Daren Blomquist, a RealtyTrac spokesman, said in a telephone interview. In Florida, monthly filings had dwindled to an average 8,500 a month, from 22,000 in 2010, as the robo-signing probe hung over the state’s real estate docket, he said.
Default filings, a lender’s first notice of serious delinquency, were sent to 58,362 U.S. properties last month, little changed from December and down 22 percent from a year earlier, according to RealtyTrac.
Auctions were scheduled on 86,037 U.S. homes, up 1 percent from the previous month and down 20 percent from January 2011. Banks repossessed 66,542 properties, up 8 percent from December and down 15 percent from a year earlier.
“Clear guidelines” outlined for lenders in the bank settlement may unlock delayed property dispositions, Moore said. On the other hand, legislation in certain states will alter the process, leading to more legal obstacles and “uneven trends” regionally this year, he said.
RealtyTrac sells default data from more than 2,200 counties representing 90 percent of the U.S.