Foreclosures drop in wake of robo-signing controversy
The number of foreclosures dropped a record 21 percent in November of this year, and experts say that the encouraging statistics may be the result of the industry crack down on the controversial use of robo-signing, CNN Money reports.
The figures are 14 percent lower than they were during the same period last year, and in terms of individuals who actually lost their homes to bank repossessions, the number is even lower – nearly one third less than in October. Industry analysts say that the reduction of robo-signing by banks has caused a slowing in the foreclosure process and may not be indicative of an actual growth in the housing market.
"I wish the report was actually good news," Rick Sharga, spokesman for the online foreclosure marketer RealityTrac, told the news source. "But it's just an artificial drop. For most borrowers in foreclosure, it will be a temporary reprieve."
Robo-signing is the practice of using an automated process to produced forged execution of documents such as mortgage assignments, satisfactions and affidavits related to a number of legal matters without any knowledge of the facts they are attesting to.
The fraudulent practice came to light in the fall of 2010 and resulted in the suspension of foreclosers from many lenders such as JP Morgan Chase and Bank of America.
According to the news source, the skepticism stems from the fact that foreclosers dropped more significantly in states that required the courts to sanction foreclosures, indicating that the oversight is mostly responsible. Additionally experts warn that the good news may be short lived as the moratorium placed on Bank of America is beginning be phased out and foreclosures are likely to pick up again early next year.