Foreclosures Slowing Nationwide
Looking at the statistics for April 2011, the pace of foreclosures and trustee sale notices has slowed dramatically compared to last year. In Los Angeles the rate is down a full 17.41%.
This slowing of foreclosures, however, does not necessarily mean less families are in trouble. Many still are. Rather, the slowing is likely indicative of banks intentionally slowing the foreclosure process as a result of increased scrutiny into their practices.
In many markets, the backlog is allowing homeowners to stay in their homes for several years without paying their mortgages. In Phoenix, I have routinely seen clients staying in their homes for two years or more without paying their mortgages. While this may be a much needed financial break for struggling homeowners, some argue that the longer the foreclosure process is dragged out, the longer the economic recovery will take.
One benefit of the increased scrutiny on the foreclosure process is that banks do seem more willing to consider loan modifications and short sales as alternatives. These solutions avoid the robo-signing problems that initially plagued some banks.