Holiday Moratoria Didn't Reduce Foreclosures


I wasn't exactly surprised to see the total year-end foreclosure tallies from RealtyTrac today, but I was surprised to see that foreclosures actually surged in December, which is traditionally/historically a slow month because lenders impose moratoria over the holidays. They know no sheriff wants to toss the family out of a home with a Christmas tree.

Still foreclosures in December surged 14 percent from the previous month, according to today's report.

Here's the answer from RealtyTrac's Rick Sharga:

In fact, our numbers surged in early December and dropped off significantly throughout the month.

We've attributed the growth to this being the end of both the quarter and the year, and lenders trying to clean up their books.

Secondarily we're probably starting to see some of the foreclosures hitting the books now after being delayed over the past few months by legislative or procedural issues (Nevada, for example, was up significantly after two months of artificially low numbers while the state put its mandatory mediation program in place). The spike in REOs also supports this theory.

I would also add that we are seeing many of those borrowers who did not make the final cut in the government's Home Affordable Modification Program go back onto the foreclosure rolls.

Tomorrow we get the latest monthly HAMP report, so tune in to see if the program is doing any better at moving borrowers from trial modifications to permanent ones; I doubt it.

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Questions? Comments?