The housing market is improving, no question. Home prices are rising, albeit in fits and starts. Fewer borrowers are falling behind on their mortgage payments. All of this is true, but in no way accounts for a nearly 22 percent drop in the number of new foreclosure proceedings by banks in October.
Lender Processing Services, which reported that number Wednesday is quick to caution that the one month drop, after a spike in September, is likely due to changes in mortgage servicing that went into effect in September under the $25 billion mortgage settlement. Servicers are now required to give borrowers a 14-day notice in writing before referring a loan for foreclosures. Those letters began going out in September.