New Foreclosures Plummet:
New Foreclosure filings drop 22%.
The housing market is improving, no question. Home prices are rising, interest rates are low, inventory levels have fallen and fewer borrowers are falling behind on their mortgage payments. All of this helped to temporarily put a curb on new foreclosure filings by banks in October (the most recent data published).
The housing market is improving, no question. Home prices are rising, interest rates are low, inventory levels have fallen and fewer borrowers are falling behind on their mortgage payments. All of this helped to temporarily put a curb on new foreclosure filings by banks in October (the most recent data published).
Lender Processing Services reported that the decline also has to do with changes in mortgage servicing that went into effect in September under the $25 billion mortgage settlement. Servicers are now required to give borrowers a 14-day notice in writing before referring a loan for foreclosures. Those letters began going out in September.
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.
Regardless of the reason, the fewer homes on the market at depressed prices, the better it is for the housing market.
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