March 10, 2011 in Business

Lenders delaying home loan takeovers

Foreclosures drop to 36-month low
Alex Veiga Associated Press
 

LOS ANGELES – The number of U.S. homes in some stage of foreclosure fell last month to a 36-month low, as lenders delayed taking action against homeowners amid heightened scrutiny over banks’ handling of home repossessions.

Foreclosure-related notices sent to homeowners in February tumbled 14 percent from January and 27 percent versus the same month last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

Initial default notices, scheduled foreclosure auctions and homes repossessed by lenders all posted declines in February.

While severe winter weather was likely a contributing factor, the sharp drop-off in foreclosure-related notices was primarily due to lenders taking a more measured approach to their foreclosure processes since the industry came under fire last year.

Many lenders temporarily froze foreclosures last October while they reviewed and, in some cases, re-filed foreclosure documents. That process has continued this year.

Initial default notices fell 16 percent from January and 41 percent from a year ago, while scheduled foreclosure auctions declined 10 percent versus last month and 21 percent from February last year, RealtyTrac said.

Meanwhile, lenders repossessed 64,643 homes last month, down 17 percent from January and 18 percent from the same month last year.

About 2 million U.S. households are in foreclosure proceedings. In addition, around 5 million borrowers are at least two months behind on their mortgages.

All told, 225,101 U.S. homes received at least one foreclosure-related notice in February, or one in every 577 households, RealtyTrac said.

At a state level, Nevada posted the nation’s highest foreclosure rate for the 50th consecutive month in February, with one in every 119 households receiving a foreclosure notice.

Arizona had the No. 2 spot, while California held the third-highest rate of foreclosure.

Rounding out the top 10 in February: Utah, Idaho, Georgia, Michigan, Florida, Colorado and Hawaii.

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