New Foreclosure Filings Fall to Seven-Year Low

NEW YORK (TheStreet) -- Foreclosure activity fell 27% in September from last year but rose 2% from a month earlier, according to the latest report from RealtyTrac.

Foreclosure filings, which includes notices of default, scheduled auctions and bank repossessions, have declined annually for 36 consecutive months.

There were a total of 376,931 properties with foreclosure filings at the end of the third quarter, down 7% from the previous quarter and down 29% from the year-earlier quarter.

New foreclosure filings or foreclosure starts fell 39% from a year earlier to a seven-year low.

Foreclosure activity started to decline in October 2010 after lenders and servicers were accused of improperly signing off on foreclosure documents in a practice called "robo-signing."

After a moratorium was imposed on foreclosure activity, the five biggest servicers, including Bank of America  (BAC), JPMorgan Chase  (JPM) and Wells Fargo  (WFC) entered into a $25 billion mortgage settlement with regulators that required them to offer billions of dollars in mortgage relief and foreclosure prevention to borrowers.

States including California and Nevada have since enacted tougher foreclosure laws that have made it increasingly difficult for banks to foreclose on borrowers.

States that follow a judicial foreclosure process, which requires banks to prove the borrower is in default in court, have seen a growing backlog of foreclosures as courts are overwhelmed by the sheer number of cases.

The average time to complete a foreclosure is now 551 days nationwide, up from 526 days in the second quarter and up 44% from 382 days in the third quarter of 2012.

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