The nation witnessed a significant decline in foreclosure starts for the last two months, with a 21.9% drop in October and an almost 48% drop on a year-over-year basis, according to new data from Jacksonville, Fla.-based Lender Processing Services (LPS). While these figures represent a nearly 7% decline in overall foreclosure inventory, LPS warns that this is likely to be a temporary situation.
‘LPS observed a drop-off in foreclosure starts in September that accelerated in October,’ says LPS Applied Analytics Senior Vice President Herb Blecher. ‘This decline coincided with the implementation of new procedural changes outlined in the National Mortgage Settlement, which requires, among other things, that mortgage servicers provide written notice to borrowers 14 days prior to referring a delinquent loan to a foreclosure attorney. This has resulted in what is likely a temporary slowdown in foreclosure starts that we do not believe is indicative of a longer-term trend.’
During October, the states with highest percentage of non-current loans were Florida, Mississippi, New Jersey, Nevada and New York, while the states with the lowest percentage of non-current loans were Montana, Wyoming, South Dakota, Alaska and North Dakota.
