Sharp Drop in DC Foreclosures is Temporary Good News

• April 14th 2011

by Mark Wellborn

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Foreclosure listing firm RealtyTrac reported recently that the number of homes repossessed by banks in the first quarter of 2011 was down 6 percent from the last quarter in 2010 and down 17 percent year-over-year. In the DC area, the drop was even more significant — there were 6,619 properties with foreclosure filings in the first quarter of 2011, down just over 50 percent from the first quarter of 2010.

While this seems like optimistic news, the first-quarter drop was due in large part to lender processing delays. From the Associated Press:

The drop-off in foreclosure activity stems from foreclosure documentation problems that came to light last fall. Many banks have since revisited thousands of foreclosure cases, delaying the processing of new foreclosures. The logjam has been compounded by court delays in states such as Florida, New York, and New Jersey, where foreclosures must be approved by a judge.

In a press release, James J. Saccacio, chief executive officer of RealtyTrac, said that the housing market “is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork.”

There were 63 foreclosure filings in DC proper last quarter, down about 88 percent from a year ago. In Maryland, filings fell 68 percent, and in Virginia, there was a 29 percent drop.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/sharp_drop_in_dc_foreclosures_is_temporary_good_news/3326.