Falling Foreclosures — Why?

The number of completed foreclosures in Massachusetts dropped by 44% in February to 515, down from 917 during the same month last year, according to new figures released today. Of course, the Massachusetts housing market is probably one of the healthier ones in the nation, which is why the decline in foreclosures is so steep. But there's something else going on here as well. Servicers, from what I'm told, are getting a bit gun shy when it comes to filing foreclosure papers. Why, you may ask. Answer: the Robo-signing scandals of the fall. In other words, some servicers are putting off the inevitable or are only foreclosing on 'slam dunk' cases where the mortgagor has moved out of the house and could care less about what happens since he/she is already so far behind on their payments. This phenomena is adding to the 'shadow inventory' and likely will prolong the housing correction.