[EMBARGOED UNTIL 9:01 PM PACIFIC TIME ON WEDS. FEB 15]
Foreclosure activity in the U.S. in January declined 19% from a year earlier, according to a report by RealtyTrac of Irvine.
Despite the drop in foreclosure filings — from the default notice that begins the foreclosure process to the auction scheduling and the sale of the house — the foreclosure tracking company said in a release that foreclosures are primed to increase.
For the first time in more than 12 months, foreclosure activity increased in several states where a court order is typically required to take a home back, including Florida, Illinois, Indiana and Pennsylvania.
“We expect the pattern of increasing foreclosures to continue in coming months, especially given the finalized mortgage and foreclosure settlement,” RealtyTrac Chief Executive Brandon Moore said.
That deal, announced last week, would settle claims by 49 state attorneys general and certain federal agencies against the nation’s five largest banks related to errors in the foreclosure process. Many experts believe foreclosure processing has been slowed as banks awaited clarification of the terms of that deal.
California foreclosure filings hit a 50-month low last month: 51,584. That was a 23% decline from January 2011. California posted the nation’s second-highest foreclosure rate, after Nevada, and nine out of the 10 hardest hit cities were in the state.
Experts warned that the Golden State could see more troubled properties hitting the market now that the settlement over foreclosure abuses has been reached.