RealtyTrac reported today that foreclosure activity decreased by 3 percent compared to the previous month, and by 14 percent compared to November of 2010, but that a nine-month high in scheduled foreclosure auctions suggested that a “new set of incoming foreclosure waves” may be coming. I’m not so sure I agree.
Process delays related to “robo-signing” and other problems began to slow down foreclosure activity in mid-October, 2010. Last November was the first month where these delays really affected the numbers in the RealtyTrac report – the 262,339 foreclosure actions reported were the lowest number since November of 2008, and down 14 percent from November of 2010. If this month’s report was to be an indication that the delays were over and foreclosure activity was going to re-start in earnest, we should have seen an increased level of default activity; instead, default notices were actually down by 9 percent compared to last year. REO activity was off by 17 percent. And what about that nine-month high in scheduled auctions? Even those were off by 17 percent from last year’s numbers.
None of this suggests a coming wave of foreclosure activity to me; in fact, the numbers indicate that activity continues to slow down, even compared to last year’s artificially low numbers. Whether this continued decline is due to ongoing process delays, legislative or regulatory issues, seasonal slowdowns or industry bandwidth is something we can cover in a subsequent post. But activity levels continue to be lower than what market conditions suggest that they should be.
Don’t get me wrong: with several million seriously delinquent loans waiting to enter the foreclosure process, it’s almost inevitable that we’re still going to see an awful lot of foreclosure activity for several more years. But I think it’s more likely that we’ll see these foreclosures continue to happen at a steady drip rather than a new, massive wave.