The number of home foreclosures fell by 33 percent last year, according a new report released by RealtyTrac. While the numbers looked good for the year, the company explains that the drop was attributed to a continued backlog of paperwork, not necessarily an improvement in the housing market.
Foreclosure Filings Fall to 3-Year Low
It appears that 2011 was a good year for foreclosure filings—at least, that’s what the numbers show. RealtyTrac reported on Thursday that total filings of default notices, scheduled actions and bank repossessions dropped to 2.7 million last year, which represented a 33 percent drop from a year earlier and was the lowest level for foreclosure filings and repossessions since 2007.
The report also revealed that one in every 69 homes had at least one foreclosure filing during 2011 with a total of 804,000 homes being repossessed. While this sounds like a lot, RealtyTrack said last year was actually an improvement over 2010 when one in every 45 households received filings and 1.05 million homes were repossessed.
Home Foreclosures Drop a Result of Paperwork Backlog
As with many home foreclosures released over the past year, RealtyTrac explained that the significant drop in foreclosure filings and repossessions was largely attributed to a foreclosure backlog that has plagued the housing market for well over a year.
The widely criticized robo-signing scandal involving lenders that illegally pushed foreclosure documents through the pipeline without receiving proper authorization from courts had a huge impact on the industry. In fact, in Feb. 2011 foreclosure filings dropped 27 percent from a year earlier due to the scandal.
Banks, facing pressure from government officials, have slowed down the amount of time they process paperwork to ensure it is legal and proper. In the fourth quarter of 2011, it took 348 days to process a foreclosure versus 305 days a year earlier.
With the number of foreclosure filings, repossessions and properties sitting on the market is still high, experts expect foreclosure activity to increase in 2012.
