FORECLOSURES ARE DOWN

Foreclosure activity has fallen to a 40-month low, but not because of any recovery in the housing market, a new report finds. Rather, the slowdown comes from massive delays in processing foreclosure paperwork.

In April, overall foreclosure filings - including default notices, scheduled auctions and bank repossessions - declined for the seventh month straight to 219,258, a 9 percent decrease from March and a 34 percent decrease from April of last year. Banks seized 69,532 homes last month, a 5 percent drop from March, according to data provider RealtyTrac.
"This slowdown continues to be largely the result of massive delays in processing foreclosures, rather than the result of a housing recovery that is lifting people out of foreclosure," said James J. Saccacio, chief executive officer of RealtyTrac, in a press release.

Nationwide, foreclosures completed in the first quarter of the year took an average of 400 days from initial default notice to conclusion, up from the 340 days the process took last year and more than twice the average time - 151 days - it took to complete a foreclosure in the first quarter of 2007. In some states, that number soared higher. In New Jersey and New York, the average time frame in the first quarter of this year was 900 days. In Florida, it was 619.

With home prices still falling, a slowdown in foreclosures driven by paperwork delays is bad news for the overall housing market recovery. Home prices hit their lowest point in two years in April, falling 0.7 percent below March 2009 levels, according to a recent report by Clear Capital. Housing experts say that the data from RealtyTrac's report does not indicate that a reversal of this trend will be quickly forthcoming