Rate of Foreclosure Drops in Phoenix
Rate of Foreclosure Drops in Phoenix
Foreclosures in metro Phoenix fell to a 32-month record low in November. According to data recently released by a local Real Estate information firm, pre-foreclosures, also called trustee sales notices, fell from 6,728 in October to 5,607 in November. That is the lowest level foreclosures in the area got into since March 2008.
Market observers attributed the drastic decline in foreclosure activity to a two-month foreclosure moratorium imposed by Bank of America, which is the most active lender in the city. It could be noted that prior to the foreclosure halt, the bank had been actively foreclosing about 50 properties daily. When Bank of America decided to temporarily stop its foreclosure activities, it postponed trustee sales of up to 8,000 homes in Phoenix.
Last week, the bank's moratorium expired. Analysts emphasize that Bank of America has more than two months of foreclosure activities to catch up on. Thus, they are certain that foreclosures in Phoenix would jump to near-record-high levels starting in January and lasting for several months next year.
Currently, troubled homeowners who are facing foreclosure may not need to worry about possibly being evicted from their homes over the holidays. Bank of America traditionally joins other mortgage providers like Wells Fargo, JP Morgan Chase, Fannie Mae, and Freddie Mac in halting foreclosure evictions for two weeks in time for the holidays. The foreclosure freeze would last from December 20 to January 3.
Bank of America was the only bank that included the state of Arizona in its foreclosure moratorium, in October. Other lenders did not halt their foreclosure activities in the state. The moratoriums are in line with accusations filed in September that most banks mishandle borrowers' foreclosure documents. Investigations have unveiled the robo-signing' scheme in the mortgage industry. Through robo-signers, banks are able to process thousands of foreclosure documents in as fast as a single day even without legal review.
The moratorium of Bank of America has helped put the brakes on ongoing foreclosure waves in Phoenix. The foreclosure freeze is more like a welcome reprieve for numerous struggling homeowners in the area. However, local housing market experts get concerned that the long delay in the bank's foreclosure activities would lead to an oversupply or glut of inexpensive foreclosed homes.
It is expected that in the first quarter of 2011, numerous foreclosed homes would be put up for sale in the metro. That would logically result cheaper price tags, which could signal another bout of cheap buying spree for strategic buyers and investors.
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