NEW YORK (Reuters) - Foreclosure filings plunged in November from the month before as mortgage companies being scrutinized for court processing errors halted activity, according to a RealtyTrac report on Thursday.
Homeowners received 262,339 notices of default, auctions and bank repossessions last month, a drop of 21 percent from October and the steepest decline since RealtyTrac first published the statistics in January 2005.
Revelations that loan services including GMAC Mortgage and Bank of America Corp had identified problems with court foreclosure papers spawned a firestorm of criticism over the companies, which froze processing in some cases. These errors included submission of affidavits that were improperly reviewed en masse by so-called robo-signers.
“Fallout from the robo-signing controversy forced lenders and services to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork,” James Saccacio, chief executive officer of RealtyTrac, said in a statement.
Barbara Desoer, Bank of America’s mortgage chief, on Wednesday said the foreclosure process would regain speed in January. The bank, the largest U.S. servicer, last week began refilling documents on 16,000 foreclosure cases in 23 states.
Some of the decrease in foreclosure filings could also be attributed to a seasonal drop of 7 to 10 percent that typically occurs in November, Saccacio said.
Additional reporting by Joe Rauch in Charlotte; Editing by James Dalgleish