Despite Robosigning Scandal, Foreclosure Activity Declines Just 4% In October

Tyler Durden's picture

The latest number from RealtyTrac is out, and it confirms that while there has been a modest dip in October foreclosure activity, it is hardly material, leaving many to wonder if banks truly did halt any of their foreclosure activity as most had indicated (seemingly dishonestly). In October 332,172 properties received a default notice, were the subject of a scheduled auction or an REO (repossession), which are all the events which RealtyTrac defines as a foreclosure, a number just 4% lower compared to September's 347K, and higher than the 325K foreclosures recorded in July rate. Yet sifting through the numbers indicates that there is a pronounced shift within the strata: in the REO category there was a 9% drop as banks repossessed only 93.2K properties, compared to 102.1K last month, which also was an all time record. It appears the REO category is the one which is seeing the biggest bang for the robosigning buck. RealtyTrac's commentary is not surprising: "October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice,” said James J. Saccacio, chief executive officer at RealtyTrac. “The numbers probably would have been higher except for the fallout from the recent 'robo-signing' controversy — which is the most likely reason for the 9 percent monthly drop in REOs we saw from September to October and which may result in further decreases in November." And as usual, Nevada, Florida and Arizona continue to be the states with the highest foreclosure rates.

Some details on foreclosure activity by type:

Foreclosure Activity by Type

A total of 100,575 U.S. properties received default notices (NOD, LIS) in October, a 2 percent decrease from the previous month and a 19 percent decrease from October 2009 — the ninth straight month where default notices have decreased on a year-over-year basis.

Default notices were still up on a monthly basis in several states: Florida LIS were up 2 percent from the previous month; Ohio LIS were up 10 percent; and Illinois LIS were up 24 percent. Meanwhile, NODs decreased on a monthly basis in California (down 9 percent from the previous month), Nevada (down 17 percent), and Michigan (down 18 percent).

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 138,361 U.S. properties in October, a 3 percent decrease from the previous month but still a 6 percent increase from October 2009. Scheduled auctions decreased month-over-month in 26 states and the District of Columbia, while 16 states posted year-over-year decreases in scheduled auctions.

Lenders foreclosed on 93,236 U.S. properties in October, down 9 percent from the record high in the previous month but still up 21 percent from October 2009. Bank repossessions (REOs) decreased month-over month in 33 states and the District of Columbia, while 14 states posted year-over-year decreases in REOs. Including October, lenders have foreclosed on an average of more than 91,000 properties each month this year.

What is strangest is that while the fraudclosure scandal was already in full force in October, coupled with various self-imposed foreclosure halts by assorted banks, the impact has so far been extremely muted. It either means that banks have been misrepresenting the degree by which they have halted their foreclosure activity, or that there is yet another major information disconnect in yet another causal important data set.



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Mr Lennon Hendrix's picture

Many houses, maybe half of them, are worth nothing.  They serve no benefit in a nation that has outsourced almost all job sectors.  America is broke and the banks are still holding it hostage.  For what I dunno.  They are sadists/masochists.

tallystick's picture

So a default notice is being counted as a foreclosure? Well then it's a meaningless stat.  Banks don't have to risk perjuring themselves in court if they count a NOD as a foreclosure.

Eternal Student's picture

Correct. And let's not forget that claim reported earlier this week that the Banks had actually stopped doing real foreclosures after their self-imposed moratorium was over. This claim was made, IIRC, by one of the lawyers for one of the big banks.

The reason they are still sending out notices, according to him, is so that it looks like they are still doing foreclosures.

Housing's about to get killed. This will make the last biggest housing bust in the 1300's look good.

Burgerbuilder's picture

Destruction of property law combined with a debased currency sounds so medieval.

Hidetora's picture

...and so in keeping with the communist plan of destroying america.

Captain Hindsight's picture

It surprises me that they make no mention of Short Selling.  The borrower still has 90 days after the NOD is served to short sell their house. 

 It would be easy for this data to be skewed; if short sales rose (they are) there would be less properties repossessed by the the banks.  Not necessarily because the robo-signing scandal.  I would assume that would have a bigger affect solely on the NODs. 

Captain Hindsight's picture

Maybe.. they shouldn't have kept interest rates so low for so long...

dick cheneys ghost's picture

my brother does residential real estate appraisals for a Large money center bank (starts with a B, ends with an A). on a recent conference call, said bank told appraisal staff that a "300 percent increase in reo appraisals" would happen in 2011. said bank did not say if if it was shadow inventory or anticipated worsening of the housing market.


apberusdisvet's picture

I'm thinking of starting a demolition business; first Florida, then Nevada; perhaps Arizona.  I'll franchise out the DC area but only if the franchisee supplies his/her own heavy weapons.

Grand Supercycle's picture

EURO daily chart bearish warnings continue.

US Dollar daily chart bullish warnings continue.

Hidetora's picture

I am shocked, and I mean SHOCKED that this hasn't gotten bigger.  Then again, Chris Whalen did say it would take 3-6 months.

Anyone have a chrono-accelerometer?

Hidetora's picture

I am shocked, and I mean SHOCKED that this hasn't gotten bigger.  Then again, Chris Whalen did say it would take 3-6 months.

Anyone have a chrono-accelerometer?

xanax's picture

Those of us that have been ultra-bearish on housing since 2003 are just over the whole thing, which is why it hasn't blown up.  At this point I think most people are just "oh wow, another scandal, business as usual" which is sad.  When was the last time you heard a big story about Iraq?  It's just like "oh yeah, more atrocities and death, that whole thing."

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