Friday, December 10, 2010

Phoenix area foreclosures hit 32-month low

Foreclosures across metro Phoenix plummeted to a 32-month low in November, but the decline probably is only temporary.

Big banks, including one of Arizona's largest lenders, put foreclosure proceedings on hold in recent months amid nationwide questions about how they handled the documents used to take back homes.

That move put the brakes on the region's ongoing wave of foreclosures.

But while the pause was a welcome reprieve for many struggling homeowners, real-estate analysts expect lenders to ramp up their foreclosure activity in the next few months.

Lenders usually foreclose through an auction process known as a trustee sale in Arizona.

Notices of trustee sales, so-called pre-foreclosures, dropped to 5,607 last month from 6,728 a month earlier, according to real-estate data company Information Market.

That's the lowest level of Phoenix-area foreclosures initiated in a month since March 2008, 33 months ago.

Actual foreclosures plummeted to 2,509, also the lowest since March 2008.

Most of the decline in last month's foreclosure activity is because of a two-month moratorium by Bank of America.

Before the moratorium, the lender had been foreclosing on 50 homes a day in the region.

BofA pushed back the trustee sales of more than 8,000 Phoenix-area homes to January or later during its moratorium, said Tom Ruff, analyst with Information Market.

That moratorium expired this week.

"BofA has two months of foreclosures to catch up on," Ruff said.

"That almost guarantees near-record foreclosures in the coming months."

During the past few days, BofA started foreclosing on Valley homes again.

Most people losing homes to foreclosure don't have to worry about having to move over the holidays.

BofA, as well as mortgage giants Fannie Mae, Freddie Mac, Wells Fargo and JP Morgan Chase, have said they won't enforce foreclosure evictions from Dec. 20 to Jan. 3.

Several national lenders announced moratoriums on foreclosures a few months ago, but Bank of America was the only one to include Arizona.

GMAC started the foreclosure-moratorium movement in late September when it decided to stop seizing foreclosure homes in some states so it could double-check its paperwork. JPMorgan Chase and PNC Financial followed with similar actions in those states.

The freezes followed accusations of "robo-signing" cases that involved mortgage-servicer employees signing hundreds of foreclosure documents a day without reviewing them or verifying that the paperwork was correct. A small number of foreclosures have been canceled or retracted due to the moratoriums.

Housing analysts have been concerned the delay in foreclosures by BofA will result in an oversupply of inexpensive foreclosure homes for sale in metro Phoenix during the first few months of 2011.

An oversupply could further drive down home prices, analysts believe.

by Catherine Reagor - Dec. 10, 2010 12:00 AM
The Arizona Republic

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