The number of foreclosure sales spiked in January as banks and government agencies started to clear the backlog of properties that have been in the foreclosure process for several years, according to data released Tuesday.
Foreclosure sales rose 29% in January from a year earlier, according to Lender Processing Services (LPS), while the number of newly-initiated foreclosures jumped 28% in the same period.
The rise in foreclosure sales comes after the five largest mortgage servicers reached a $25 billion settlement with federal and state officials. Banks had slowed their foreclosure processes after some widespread robo-signing practices came to light in 2010.
LPS found that the increase in newly initiated foreclosures can be attributed primarily to Fannie Mae and Freddie Mac. New foreclosures authorized by the government-sponsored enterprises rose 60% in January, compared with a 10% increase in foreclosures authorized by other types of investors, including banks and thrifts, LPS found.
Its January results also show that the percentage of repeat foreclosures hit a new all-time high, making up 47% of newly-initiated foreclosures. Nationwide, more than 40% of loans in foreclosure were more than two years past due, and foreclosure sales activity is concentrated in loans that are seriously delinquent, according to LPS.
Overall, 7.7% of mortgage-holders were 90 days or more delinquent or in the process of foreclosure in January, a drop from 8.3% a year earlier.