As reported in DSNews.com, although still at an elevated level, home foreclosure inventory is shrinking and has fallen for 15 straigh months as of January 2013, per a CoreLogic report. Foreclosure inventory accounted for 2.3 percent of all homes with a mortgage, down from 3.5 percent in January 2012. “The backlog of distressed assets continues to fade as the foreclosure inventory has fallen to a level not seen since mid-2009,” said Mark Fleming, chief economist for CoreLogic.
California Homeowner Bill of Rights & Foreclosures
One of the most-common misconceptions held by underwater homeowners is that the new California Homeowner Bill of Rights keeps a lender from foreclosing on a home regardless of whether the borrower is pursuing a loan modification or a short sale. The bill of rights is supposed to restrict lenders from “dual tracking” – repossessing a home while a homeowner is awaiting a decision on a home loan modification application.
When a borrower sends in a complete loan modification application, the foreclosure process should instantly come to a halt. If the lender rejects the application, the borrower has a 30-day period to appeal the decision. The home cannot be foreclosed during that time either. In a short sale, however, the foreclosure process is halted only after all the lien holders on a home agree to the short sale and the prospective buyer gets financing. All of that can take months. The bottom line, according to one broker: “A foreclosure could easily occur during the attempt to bring about a short sale.”