Foreclosure filings were reported on 225,101 U.S. properties last month, according to RealtyTrac.
That represented a 14 percent drop from the previous month and a 27 percent decline from a year earlier, the largest year-over-year decrease since the firm began issuing its report in 2005.
“Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said RealtyTrac CEO James J. Saccacio, in a release.
“While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures. We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”
Default notices, the first step in the foreclosure process, totaled 63,165, down 16 percent from January and 41 percent from February 2010.
During the month, mortgage lenders actually repossessed 64,643 properties, down 17 percent from a month earlier and 18 percent below year-ago levels.
Bank repossessions (REO) hit a 22-month low last month and were off 37 percent from their peak of 102,134 seen back in September 2010.
Interestingly, REO in states with a judicial foreclosure process decreased 24 percent from January and were down 35 percent from February 2010, while repossessions in non-judicial foreclosure states declined just 14 percent from January and eight percent from a year earlier.
Expect foreclosures to heat up later this year once the robosigning scandal is behind us.