Foreclosure activity continues to drop

The recent U.S. Foreclosure Market Report for July 2011 from RealtTrac showed foreclosure filings decreased 4 percent from June to July 2011, a 35 percent drop from July 2010. According to the data, foreclosure activity has dropped to a 44-month low.

Ten states with the highest foreclosure rate, including Nevada, California and Arizona, account for more than 70 percent of the U.S. total foreclosure activity. Default notices decreased 7 percent in July, and foreclosure auctions dropped 5 percent from June.

James Saccacio, CEO of RealtyTrac, said foreclosure activity has decreased for 10 straight months, while the process of foreclosing has slowed significantly after the robo-signing controversy in 2010.

"It appears that the foreclosure processing delays, combined with the smorgasbord of national and state-level foreclosure prevent efforts - including loan modifications, lender-borrower mediations and mortgage payment assistance for the unemployed - may be allowing more distressed homebowners to stave off foreclosure," Saccacio said.

USA Today recently reported that the foreclosure process on more expensive homes are take longer than less expensive homes, which leaves defaulting borrowers in their homes without mortgage payments. According to data from LPS Applied Analytics, by the time they were sold or repossessed mortgages on homes costing $417,00 to $999,999 had been delinquent an average of 647 days, nearly four months longer than homes costing less than $417,000.

Tom Goyda, spokesman for Wells Fargo, told the news source that the price of the home does not determine the length of the foreclosure process. Rather, banks look at the type of loan, the type of home, and the financial profile of the homeowner when determining the order of processing foreclosures.  

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