Foreclosure Numbers Plummet as Moratorium Continues

Report says foreclosure sales were down 44 percent from a year ago

Foreclosure sales in Riverside County and across the state dropped by double digits last month as several financial institutions continued a moratorium on foreclosures in the wake of a record-keeping scandal.

According to Bay Area-based ForeclosureRadar.com's monthly report, 1,400 repossessed properties were auctioned off countywide in October, compared to 2,103 in September, a 33 percent decline.

According to the report, foreclosure sales were down 44 percent from a year ago, when 2,485 properties ended up on the auction block.

Statewide, 12,773 properties in default were sold last month, compared to 18,080 in August, a 29 percent plunge. A year ago, 19,926 foreclosure sales were recorded in the state, according to ForeclosureRadar.com.

The company's founder, Sean O'Toole, said lenders stung by the "robo-signing" scandal suspended foreclosure proceedings in September and continued to hold off in October.

Robo-signing involved lenders cutting corners in processing tens of thousands of foreclosure documents, failing to vet them closely, raising doubts about equity, the validity of claims and other issues, according to published reports.

Five major lenders -- Ally Financial, Bank of America, Litton Loan Servicing, JP Morgan Chase and PNC Financial Group -- suspended foreclosure proceedings in September.

O'Toole said PNC and Bank of America are continuing the moratorium.

"Despite a short-term impact to foreclosure sales, the latest foreclosure scandal will likely lead to little more than a new scam on those who have already lost their home," said O'Toole.

"Much like the cottage industry of loan modification consultants that took up-front fees and provided little in return, we are now seeing consultants promising to overturn foreclosure sales, despite any experience in actually doing so,"
 

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