Many economists and housing market analysts have been expecting another wave of mortgage foreclosures to hit soon, now that the robo-signing mess has been sorted out. Yet, according to new reports from LPS Applied Analytics and CoreLogic this week, the foreclosure waters are still fairly calm.
Foreclosures did rise 8.1 percent in March from the month before, based on findings from LPS, but they were still down 31.1 percent from March 2011. The LPS March Mortgage Monitor also found that mortgage delinquencies fell 8.8 percent, a sign that homeowners may now have a better grip on their finances. The number of borrowers who were in foreclosure or at least 90 days behind on their payments had fallen 6.7 percent as well.
“What we’re seeing so far in the data, it doesn’t amount to a flood. There are regional bursts of activity here and there, but not that wave of foreclosures that people were expecting,” said Herb Blecher, senior vice president at LPS Applied Analytics as quoted in a Wall Street Journal blog post.
CoreLogic also found that foreclosures were down significantly. It’s monthly survey reported that there were 69,000 completed foreclosures in March, down from 85,000 one year earlier. While the CoreLogic data showed no national change in delinquencies, it did find that late payment rates were getting better in some of the worst-hit housing states like Nevada, Arizona and California.
It is still possible that backed-up foreclosure inventory could hit the market in the near future. There is also the possibility, though, that with the new rules imposed on big banks through the robo-signing settlement, banks may try to manage foreclosures differently now, like through more short-sales and writing down customer balances. Those steps could help prevent any major foreclosure waves from devastating the market.