Foreclosure activity has dropped to its lowest level in three years, as mortgage servicers continue to work on problems with their legal procedures, RealtyTrac reported Wednesday.
“The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac, a California company that tracks the foreclosure market. “We expect to see the numbers bounce back, but that will likely take several months.”
Foreclosure activity was down 50 percent in New Jersey, and 27 percent nationally in February compared with a year ago. Foreclosures have been held up while lenders deal with the fallout from allegations of “robo-signing” — when bank employees sign affidavits and other legal documents without verifying them.
In December, New Jersey Chief Justice Stuart Rabner ordered six large lenders to show why their foreclosure actions should not be frozen in light of the robo-signing allegations. The six lenders — Ally Financial, Bank of America, JP Morgan Chase, Wells Fargo, Onewest Bank and Citibank — are due in court in Trenton later this month in the case.