Lenders repossessed 9% fewer homes in October, an indication that the foreclosure freezes put in place by several major banks could be slowing the record pace of home seizures this year, if only temporarily.
Whether the trend continues depends on how quickly the major banks correct their errors and resume foreclosing. Daren Blomquist, an analyst with real estate information site RealtyTrac of Irvine, which released the numbers, said the October data represented probably little more than a temporary slowdown.
"This is more of a blip," he said. "We would expect, even when we have seen the big decrease in [repossessions], that we would see a similar increase down the road in a few months."
Banks seized an estimated 93,236 homes nationwide last month, a notable drop from a record 102,134 homes seized in September but still 21% higher than the 77,077 in October 2009.
California experienced a decline of 23% from the previous month, with 13,754 homes seized. Home repossessions in Florida increased 1% to 13,434, but Blomquist attributed the rise to that state's slower reporting process and said he expected declines there when November figures are reported.
Several major lenders announced foreclosure freezes beginning in late September. The largest, Bank of America Corp., has declared a national moratorium on foreclosure sales — which clearly has affected repossessions in California.
Last month the bank said it had completed a review of its processes in the 23 states where a court judgment is required to take back a home, which does not include California and many other Western states. Of the 102,000 cases that were part of the bank's review, some are proceeding to foreclosure. That remains the only exception to the bank's national freeze.
Ally Financial Inc. and JPMorgan Chase & Co. also have halted foreclosures in the 23 states where court approval is required. PNC Financial and Litton Loan Servicing have said they were reviewing their processes.
Overall, the number of homes in the foreclosure process nationally decreased 4% from the previous month for a total of 332,172 and was unchanged from October 2009. A total of 100,575 properties received default notices, the first step in the foreclosure process, down 2% from the previous month and off 19% from a year earlier.