The number of U.S. homes taken back by lenders dropped to the lowest level in 18 months in November, the result of foreclosure freezes enacted by several banks following allegations that evictions were handled improperly.
Home repossessions dropped 28 percent from October and 12 percent from November last year, foreclosure listing firm RealtyTrac Inc. said Thursday.
The 67,428 homes lenders took back last month were the fewest since May 2009. But even with the decline, it was enough to push the total number of repossessions so far this year to more than 980,000 – the highest annual tally of properties lost to foreclosure on RealtyTrac’s records dating back to 2005.
“It’s almost impossible to imagine that we won’t break a million” for the year, said Rick Sharga, a senior vice president at RealtyTrac. “Unfortunately, it’s a record that we’ll probably break again next year.”
Banks had been on pace to take back up to 1.2 million homes this year before problems with foreclosure documents surfaced in late September.
Several lenders responded to heightened scrutiny over the foreclosure process by temporarily ceasing taking action against borrowers severely behind in payments while they checked to see if their employees made errors in loan documents needed to complete foreclosures.
Some banks later announced plans to resume foreclosures, though at a more measured pace, in an attempt to ensure there aren’t any flaws in the process.
Lenders’ initial freeze and slow ramp-up in foreclosure activity likely caused the sharp decline in foreclosure-related notices sent to households last month. And it’s likely to cause another drop in December, Sharga said.