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November 17, 2011

US Foreclosure Machine Kicking Back Into Gear
US lenders are ramping up their foreclosure processes as they put behind them the delays and moratoriums on home seizures prompted by last year's so-called "robo-signing" scandal. In October, nearly 231,000 US properties were in some stage of the foreclosure process, up 7 percent from August, but still a whopping 31 percent below last October's level, the last month before lenders began halting seizures to review their procedures in light of the scandal, which involved reports that lenders were using robo-signers, or employees who would routinely sign off on hundreds of foreclosure-related documents a day without verifying their authenticity.

Some states have enacted new laws that effectively slow down the process, including Nevada, which has had the highest foreclosure rate for some 58 months. The "Silver State" was still on top in terms of foreclosure activity in October, but the number decreased by 34 percent from August as a new foreclosure law went into effect last month requiring lenders to submit affidavits into public record every time they foreclose on a home. Insiders say that lenders are still working on implementing the new requirement, and that foreclosure numbers should spike again in a few months.

Elsewhere, in states that require court approval for foreclosures to be processed, activity is resuming a normal pace as courts begin pushing seizures through. In New Jersey, for example, home seizures rose 48 percent in October, while the number spiked a staggering 73 percent in Indiana. In all, there were just over 67,600 homes seized across the US last month, a figure that is likely to rise significantly in the coming months given the rise in delinquent notices as banks begin serving borrowers who have not made payments in months.

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