NEW YORK ( TheStreet) -- The pace of foreclosures slowed down significantly in 2011, but that trend was likely short-lived.
According to RealtyTrac, a new wave of foreclosures could be coming in 2012, if the recent spike in "default filings" is any indication.
A total of 3.6 million properties have been lost to foreclosure since the start of the recession in December 2007. In 2011, however, the pace of monthly repossessions slowed down and in fact hit a 44-month low in November at 56,124 according to data provided by RealtyTrac.
Overall, banks repossessed 25% fewer properties in 2011 compared to 2010. However, much of the slowdown was caused by "foreclosure processing delays" rather than a robust housing recovery, says Daren Blomquist, RealtyTrac's director of marketing communications.Controversy over "robo-signing"practices caused a flurry of investigations into banks foreclosure practices and have caused mortgage servicers to re-evaluate their procedures, leading to a slowdown in processing. States where foreclosures are approved through a judicial process are seeing the longest delays. For instance, New York properties foreclosed in the third quarter took an average of 986 days to complete the foreclosure process. "Those foreclosure processing delays mean much of the foreclosure activity that under normal circumstances would have occurred in 2011 is being deferred to 2012," Blomquist said in an email, pointing to a rise in default filings, which start the foreclosure process. The number of filings providing notice of default spiked 33% to 78,880 in August and have remained elevated since then. "This new wave will not bring foreclosure numbers back to the levels we saw in 2010, but they will create a sort of double-peak pattern after the artificial trough in 2011," according to Blomquist. The foreclosure forecast comes as analysts are beginning to predict a
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV