The number of completed foreclosures fell by nearly 50% from the third to the fourth quarters as servicers came under pressure from state and federal regulators to correct their foreclosures processes and agree to a civil settlement.
A new servicing report by Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) shows that nine of the largest bank and thrift servicers completed 95,050 foreclosures in the fourth quarter, compared to 186,850 in the third quarter.
"Moratoria on foreclosure actions during the fourth quarter among the largest mortgage servicers resulted in fewer completed foreclosures and fewer newly initiated foreclosures," says the OCC/OTS Mortgage Metrics report.
The slowdown in foreclosure activity also pushed up the inventory of defaulted loans that are in the process of foreclosure.
At yearend 2010, the nine servicers had 1.29 million of loans in the process of foreclosure, up 7.4% from the third quarter -- and nearly 20% from a year ago.
"Many mortgages remain in process of foreclosure for longer periods than historical norms," the regulators said.
The Federal Housing Administration (FHA) recently reported it had nearly 176,000 insured loans in the process of foreclosure at the end of 2010. "FHA's in-foreclosure inventory is at an historic high," the agency said.