Updated with additional information on bank foreclosures.NEW YORK ( TheStreet) -- Mortgage rates remained amazingly low for 2011, but that won't stop a coming wave of foreclosures in 2012. Mortgage rates finished near all-time historic lows in 2011. Freddie Mac ( FMCC.OB) on Thursday released the results of its Primary Mortgage Market Survey. The 30-year fixed rate mortgage rate ended 2011 with an average 3.95% for the week ending Dec.29, 2011, up from the previous week's rate of 3.91 % but significantly lower than the 4.86% averaged in the year-ago period. The 15-year fixed-rate mortgage averaged 3.24%, up from 3.21%, but lower than the 4.20% averaged a year earlier. Looking ahead, Freddie Mac economist Frank Nothaft
Meanwhile, pending home sales, a forward looking indicator of existing home-sales activity showed signs of improvement, increasing 7.3% on a monthly basis to 100.1 in November, its highest level in 19 months. Still, the biggest overhang for the housing market remains the significant foreclosure inventory that is yet to be cleared from the market as well as "shadow" inventory- properties that will ultimately wind up in foreclosure. One in every 579 housing units received a foreclosure filing in November 2011, according to RealtyTrac. Overall foreclosure activity dropped 3% in November from the previous month, but a new wave of foreclosures could be coming in 2012. "Despite a seasonal slowdown similar to what we've seen in each of the past four years, November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year," said James Saccacio, co-founder of RealtyTrac, in a news release. Bank of America ( BAC), JPMorgan Chase ( JPM) and Wells Fargo ( WFC) together account for more than 60% of the first mortgages in the country. The three are among the big mortgage servicers that have been in year-long negotiations with federal regulators and the state attorneys general to reach a settlement over alleged improper foreclosure practices including robo-signing. The robo-signing controversy and the ongoing negotiations have stalled the foreclosure process for banks. However, analysts maintain that banks need to clear their foreclosure inventory soon for housing values to fully correct and then make a stable recovery. Bank of America has the most troubled mortgage portfolio. Real estate owned and repossessed assets amounted to over $2.6 billion in the first 9 months of 2011. --Written by Shanthi Bharatwaj in New York >To contact the writer of this article, click here: Shanthi Bharatwaj. >To follow the writer on Twitter, go to http://twitter.com/shavenk. >To submit a news tip, send an email to: email@example.com.