January had fewer homes entering into the foreclosure process than in any month during the last three years. However, this could just be a sign that lenders maybe taking longer to move against homeowners who have fallen behind on mortgage payments.
It seems that banks are letting borrowers who are behind on their payments stay in their homes longer so they can delay adding to their backlog of bad loans.
Rick Sharga, a senior vice president at RealtyTrac. said, "We are still seeing the lingering after-effects of the documentation issues that plagued lenders through the last quarter of 2010. In some cases courts are being more demanding and more particular about what they'll even allow to go into foreclosure."
RealtyTrac Inc. reported today that the number of homes that received an initial default notice fell by 1 percent last month from December. Compared to January 2010 foreclosures are currently down 27 percent. Also, scheduled foreclosure auctions fell to their lowest level in two years according to RealtyTrac Inc.
Despite the fact that lenders are taking longer to move homes into the first part of the foreclosure process, they did increase the number of home repossessions in January which is down 11 percent from a year earlier.