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October 17, 2011

Foreclosures Still Holding Back Housing Recovery
According to a report issued Thursday by RealtyTrac, the nation's housing market is still being held back by foreclosures, and a massive backlog is limiting the pace of the process, assuring that the problem will plague prices for some time. Across the nation, there were just over 610,000 foreclosure filings in the third quarter, about 1 percent more than in the previous quarter. Even though the increase was just 1 percent, it was significant since it was the first quarterly uptick in foreclosures in nine months.

"This marginal increase in overall foreclosure activity was fueled by a 14% jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures," said RealtyTrac CEO James Saccacio.

Foreclosures dipped at the end of the quarter, however, totaling about 215,000 in September, down 6 percent from the prior month and 38 percent below September 2010's total. But realtors almost unilaterally agree that this downward trend is nearing and end, expecting foreclosure activity to steadily increase as lenders complete overhauls of the foreclosure process and ramp up their pace of seizures.

The average time to process foreclosures is a big reason why the backlog has grown so immense. The average time to process home seizures during the quarter was 336 days, compared to just 318 months in the previous quarter. In New York, one of the states where judicial approval is required for foreclosures, it took some 986 days to process foreclosures, with New Jersey's average right behind, at 974 days. Texas, where it took an average of just 86 days to process foreclosures, had the lowest average processing time during the quarter.

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