The most significant impact of the $25 billion robo-signing settlement has been the clarification of foreclosure standards for servicers, which has led to a higher number of initiated foreclosures, Fitch Ratings said in a note.
During the time the settlement was being negotiated, many lenders put foreclosures on hold while waiting for the final terms. With the settlement being confirmed, servicers are now moving forward at an accelerated rate with foreclosures
“Foreclosure initiation rates have risen to their highest level in three years, a sign that the settlement may have provided servicers greater regulatory clarity, thus allowing them to act more decisively,” said Grant Bailey, managing director for Fitch.
Foreclosure initiation rates rose to roughly 12 percent in June, the highest figure since first half-2009, according to Fitch.
Oaktree Law has seen this type of trend of good and bad over the last few months. We have seen a dramatic increase in principle reductions and loan modifications in both Los Angeles and Orange County. About 30 percent of loan modifications in June included a principal reduction, up from roughly 20 percent in February, According to Fitch.
But we have also received a surge of calls from homeowners whose lenders are foreclosing on their homes. This might be attributed to services waiting for the dust to settle from the settlement before foreclosing.
If you recently received a foreclosure notice please give us a call. We are skilled loan modification attorneys in Los Angeles and Orange County.