Foreclosure starts rose 28 percent while foreclosure sales soared 29 percent in January compared to the previous month, according to the latest Lender Processing Services' January Mortgage Monitor report today.
The rise in foreclosures in January is a sign that foreclosure backlogs are beginning to clear, which is considered a positive, necessary step in the real estate market's recovery, housing experts say. Lenders slowed processing foreclosures in 2010 when a robo-signing scandal surfaced, resulting in a backlog of foreclosures that prevented home prices from making a full recovery, experts say.
"It is a definite shift in that direction," an LPS spokeswoman said about the spike in foreclosures sales and starts in January. "We could be seeing the beginning of something, and we should most certainly be keeping our eyes on this over the next few months."
RealtyTrac, another company that tracks foreclosure data, reported that foreclosure filings in January rose 3 percent.
"We continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," Brandon Moore, CEO of RealtyTrac, had said about his company's report.
According to LPS, the states with the highest number of seriously delinquent mortgages in January are: Nevada, Florida, Mississippi, Arizona, and Georgia.
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