RealtyTrac: Bank Backlog, Not Recovery, Behind Drop In Foreclosures
LOS ANGELES (CBS/AP) — The number of U.S. homeowners facing foreclosure sunk to a five-year low in May, but a real estate tracking firm said Thursday that the drop is likely due to bank delays and not a recovery in the housing market.
Irvine-based RealtyTrac Inc. says the number of U.S. homeowners who were put on notice for being behind on their mortgage payments fell in May to the lowest level since 2006, the result of a slowing housing market and lingering delays in banks' foreclosure process.
But Rick Sharga of RealtyTrac told KNX 1070 that despite the data, there's no end in sight to the troubles in the housing market.
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"This is eight consecutive months where we've seen year-over-year declines in foreclosure activity, and that doesn't really speak to a recovery as much as it talks to a pipeline that's building up a deeper and deeper backlog," said Sharga.
Mortgage lenders, many of which are still working through foreclosure documentation problems that surfaced last fall, also took back fewer properties in May, the second monthly decline in a row.
Sharga said there are over four million homeowners across the country who are "seriously delinquent" in their home loans who would otherwise be on the verge of foreclosure if it weren't for the backlog.
"Most likely scenario is that the paperwork delays, the court procedural delays are probably going to linger into the summer," said Sharga.
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