Foreclosures continued to plague the U.S. housing market last quarter, while a a growing backlog has caused the length of the foreclosure process to drag on and on.
Nationwide, foreclosure filings totaled 610,337 in the third quarter, an increase of less than 1% from the previous quarter, said RealtyTrac, an online marketplace for foreclosed properties.
Even though the increase was small, it is significant since it broke the trend of three consecutive quarterly decreases, said RealtyTrac Chief Executive James Saccacio.
Region's pace slower than state, nation
Regional foreclosure filings continued to decrease in the third quarter, but at a slower pace than state and national averages.
Neil and Marilyn Strawbridge have not received a foreclosure notice on their Oviedo home despite not making payments. (Jacob Langston, Orlando Sentinel / October 5, 2011)
Mortgage default notices, property auction warnings and bank repossessions dropped by 26 percent in the Scranton/Wilkes-Barre/Hazleton metro area between July and September, compared to the same 2010 period, according to RealtyTrac, a Los Angeles-area company that collects foreclosure information.
Third-quarter foreclosure activity in the state decreased by 43 percent, and it dropped nationally by 34 percent, according to RealtyTrac.
The local data probably reflects a smaller volume of foreclosures in recent years compared to similar areas. The slower decrease than state and national rates probably reflect high regional unemployment.
"Nationally, when foreclosures started to perk up, it didn't reach us or start to percolate here until six to eight months later," said Mike Elick, president and CEO of Consumer Credit Counseling Service of Northeastern Pennsylvania, a Pittston-based agency that provides budget counseling and debt management in an 23-county region.
But the region's 9.8 percent unemployment, the state's highest, likely prevents foreclosure totals from falling faster.
"For people coming in, the No. 1 issue is that they can't pay their bills because they don't have a job, or they don't have enough income," said Jesse Ergott, executive director of Neighborhood Housing Services of Lackawanna County, a nonprofit budget counseling service.
Consumer Credit Counseling assisted more than 750 homeowners in the third quarter who needed foreclosure-related services, Mr. Elick said. The majority of counseling services were for foreclosure prevention, he said.
Foreclosures nationally decreased for the 12th straight month on a year-over-year basis, RealtyTrac reports. Activity started slowing last fall after a "robo-signing" scandal revealed that banks seized thousands of homes without adequate proof or documentation.
Evidence indicates the downward trend reversing, with foreclosure activity accelerating slowly, according to RealtyTrac.
"There's some slow up because of the delay from the robo-signings," said Joe Donato, broker/owner at Vision Realty, a Clarks Summit agency that handles foreclosed properties. "They are getting their paper straight and proceeding with more caution."
Banks also delay foreclosures to prevent further property depreciation, Mr. Elick said.
The average price of single-family homes in the metro area in August was down 11 percent from August 2010, according to a recent report from CoreLogic, a
California real estate data processor.
"Some of the lenders are sitting on some potential foreclosures because if they flood the market, how are they going to get rid of those properties?" Mr. Elick said.
An extended slump in housing prices has convinced more banks to reconfigure mortgage payments and terms to forestall foreclosures, Mr. Donato said.
"The banks are willing to work with homeowners more than before, trying to restructure loans to avoid foreclosures," he said.
All banks, though, are not so flexible, Mr. Ergott said.
"It's still a hit-or-miss thing," he said. "Some lenders are interested in trying for find workouts. Others are interested in pushing the process through."
