It’s been just over a month since Bank of America, the nation’s largest lender, joined some of its peers in temporarily halting foreclosure proceedings across the country amid reports that their paperwork was rife with errors. Some areas, including New York City, are now beginning to see the effects of the foreclosure freezes.
Today, foreclosure tracking firm RealtyTrac released its data for the month of October, revealing that the number of New York City homes on which lenders scheduled foreclosure auctions declined by 35 percent from the month before. That trend was replicated statewide, where scheduled auctions dropped by 31 percent month-over-month.
Bank repossessions, or REOs, also declined by 24 percent in New York City and by 2 percent in the state over the same time period.
According to Daren Blomquist, a spokesperson for RealtyTrac, the number of bank repossessions is likely to decline even further in the coming months. Because of the lag between when a lender takes back the title to a home and when that deed gets recorded, the October numbers don’t necessarily reflect the time period most affected by the foreclosure moratoriums, he said.
Nationwide, scheduled auctions and bank repossessions were down by 3 percent and 9 percent, respectively, from September. U.S. foreclosure activity overall — including notices of default, scheduled auctions and bank repossessions — dropped by 4 percent to 332,172 foreclosure actions, or one in every 389 homes.
“We kind of think that… as opposed to a month-over-month decrease, there would have been an increase in activity overall if not for the foreclosure freezes,” Blomquist said, noting that bank repossessions in the U.S. are still up 21 percent over one year ago.
But where the so-called robo-signing debacle is making a more tangible and immediate impact is in foreclosure sales to third parties.
RealtyTrac’s October foreclosure sales numbers are not yet available, but “we definitely are hearing anecdotally from real estate agents that the foreclosure properties they’re listing to sell are being held up until the lender feels the situation is resolved,” Blomquist said, adding that lenders “are not technically stopping properties from being scheduled for auction but they are stopping the public sale from actually occurring.”