Rising foreclosure start rates will add to the distressed property inventory and drive home prices further down, according to a report from Fitch Ratings, reflecting the impact of last year's robo-signing scandal.
More than 10% of severely delinquent loans in private-label residential mortgage-backed securities are now moving into foreclosure each month, the ratings agency said. That's nearly double the rate from a year ago when the moratoria instituted by lenders and servicers in the wake of the robo-signing debacle were in place. It's also edging closer to the 14% rate seen between 2000 and 2010.
Link Here"Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year," Fitch Managing Director Diane Pendley said in the report. "Mortgage servicers now generally feel they have implemented the corrective actions that they determined were needed."