Foreclosures Down? Not Really!

RealtyTrac, the company that tracks foreclosures (state by state) and gives national figures, reports that foreclosures, meaning homeowners getting a foreclosure notice, is at a 26 month low - ONLY 225,101, down nearly 14% (http://www.realtytrac.com/home/).
Reading and digesting the information further one discovers that the reduction is not due to fewer defaults by borrowers, or lenders/servicers having less work , but rather it is due to IMPROPER FORECLOSURE PROCEDURES.

For months it has been known that some of the largest servicers have been using so-called "robo-signers", unauthorized personnel signing assignments of mortgages and notes, and foreclosure documents. Also, as the suit by States' AGs shows, in their 27 page report, what has to be done to fix the problem. While the servicers have rebelled and are using all tools available to stop regulations, even BofA, the biggest, has made modest changes - like giving returning service members modifications and even PRINCIPAL REDUCTIONS.

The battle is getting so fierce that Sen. Richard Shelby (R), the senior Republican on the Senate Banking Committee has said that the report is a "regulatory shakedown" being conducted to "advance the administration's political agenda" (American Banker 3/9/11 )

Taking the battle over the "mortgage crisis" even further is a letter, being circulated by House Republicans to Treas. Sec'y Timothy Geithner, that calls into questions most of the report's/settlement proposal's recommendations (http://tinyurl.com/4byflk4).

So what is the "TRUTH"? Is the rate of foreclosures falling? Yes, in so far as the "foreclosers" have had to stop or be sued by all 50 states (again) and won't start again in earnerst until they get the paperwork and process straightened out. But, the rate of defaults and the "right to foreclose" have continued to climb. If RealtyTrac counted all of the refilings for corrected documentation, there would have been an increase of 30%!

The future looks bright for auctioneers, dim for homeowners with the current climate.

(Follow the link to RealtyTrac's 3 minute video report on foreclosure activity: http://www.youtube.com/watch?v=wqsyJNy9ppI

Author's Copyright by Richard I. Isacoff, Esq, March 2011
rii@isacofflaw.com
http://www.isacofflaw.com/