RealtyTrac: January Rise in Foreclosures Portends 2012 Trend
A total of 210,941 U.S. properties were in some state of foreclosure, RealtyTrac says. The number equals the the sum of default notices, scheduled auctions and bank repossessions recorded by the company. Foreclosures in 2011 plunged 34 percent from 2010, it also reports.
"Although overall foreclosure activity was down from a year ago for the 16th straight month in January, we continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," Brandon Moore, CEO of RealtyTrac, said in a statement.
The rise in foreclosures could accelerate, experts say, since the nation's five major servicers and state attorneys general recently settled a $25 billion investigation into illegal foreclosures. During the settlement negotiations, many of the servicers delayed moving forward with foreclosures, wanting to keep a low profile in the face of government scrutiny.
"The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year," Moore said.
The settlement requires banks to pay $20 billion to homeowners in the form of loan modifications and refinancings. And while it may offer relief to many distressed homeowners -- albeit somewhat arbitrarily, some experts say -- banks will not write down loans that they believe are bound to fail even after modifications. Instead, banks will probably push those homes into foreclosure, a step they may have been delaying due to government action.
"The bottom line is that 2012 will see a lot of foreclosures that should have taken place in 2011 and didn't," Rick Sharga, executive vice president of Carrington Holdings, a real estate finance company, told CNNMoney.
Daren Blomquist, vice president of RealtyTrac, told CNNMoney that he expects new foreclosure filings to jump from 1.9 million in 2011 to between 2.2 million and 2.5 million in 2012.
Billboard House Advertises Way Out of Housing Crisis
How the Foreclosure Settlement Could Affect You
Foreclosure Fire Sale: Will Bulk 'REO to Rental' Program Fly?
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.