homesmillbrae.com » January 1 http://homesmillbrae.com Thu, 20 Oct 2022 03:48:43 +0000 en hourly 1 http://wordpress.org/?v=3.1 New Foreclosures Plummet, but Fall Is Temporary http://homesmillbrae.com/1885/new-foreclosures-plummet-but-fall-is-temporary/ http://homesmillbrae.com/1885/new-foreclosures-plummet-but-fall-is-temporary/#comments Thu, 06 Dec 2012 10:36:16 +0000 http://homesmillbrae.com/1885/new-foreclosures-plummet-but-fall-is-temporary/ Continue reading →]]> As such, the impact on foreclosure starts, while significant now, is likely to be temporary as the industry adapts to the new requirements, according to LPS’s Herb Blecher. In other words, the settlement designed to protect borrowers from faulty foreclosure proceedings, is doing so but slowing the process of clearing distress yet again. This is not to be taken lightly, because until the distress is gone, the housing market will not recover at the pace we might like.

(Read More: Mortgage Deduction Is Popular, but Few Claim It)

Nearly one third (1.3 million) of sales in the past twelve months have been distressed, either REO (bank-owned homes) or short sales, according to LPS. That compares to just 226,000 in 2005 when overall home sales were twice the pace they are today.

It doesn’t stop there. The California Homeowners Bill of Rights goes into effect January 1, 2013. Similar legislation in Nevada doubled the foreclosure pipeline over the past year.

Another reason for the drop in new foreclosures may be a surge in loan modifications involving principal reduction. These are also mandated by the mortgage servicing settlement. Principal reduction modifications jumped 62 percent from October to November, according to Amherst Securities’ Laurie Goodman.

(Read More: Mortgage Applications Rose Last Week)

Article source: http://www.cnbc.com/id/100280694

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