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Foreclosures dropped sharply in February

A foreclosed home is seen for sale on 16th Street NW in Washington on August 22, 2010. More than 2.3 million homes have fallen into foreclosure since the recession began in later 2007, according to RealtyTrac Inc. Economists expect the number of foreclosures to grow into 2011. UPI/Kevin Dietsch
A foreclosed home is seen for sale on 16th Street NW in Washington on August 22, 2010. More than 2.3 million homes have fallen into foreclosure since the recession began in later 2007, according to RealtyTrac Inc. Economists expect the number of foreclosures to grow into 2011. UPI/Kevin Dietsch | License Photo

IRVINE, Calif., March 10 (UPI) -- Online property market RealtyTrac said U.S. foreclosures dropped 14 percent January to February as the paperwork debacle of 2010 stalls many transactions.

Foreclosures dropped 27 percent in January from the same month a year ago to 225,101, the firm said. It was the largest annual drop since 2005, when the firm began tracking the data.

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The foreclosure market is still reeling from last year's paperwork controversy in which many lenders were forced to review foreclosure procedures after courts balked over concerns that homeowners' due rights had been shortchanged due to rushed paper work.

Lenders were accused of "robo-signing" documents, which referred to cursory signatures placed so quickly on documents they could not have been read. Law firms that handled thousands of foreclosure cases as quickly as possible were dubbed "foreclosure mills."

In a statement, Chief Executive Officer James Saccacio said, "Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets.

"While a small part of February's decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," he said.

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