According to RealtyTrac, a real estate research company, foreclosure filings fell in Minnesota again, falling 14% compared to the same period last year. This should come as welcome news as distressed properties have put significant downward pressure on the housing market over the past 4 years.
But there is a caveat with this seemingly welcome news: Have foreclosures slowed because of structural improvements (improved economy, wage increases, principal write-downs, etc..), or have they slowed for some other reason(s)?
It is increasingly looking like the latter is the case. Most experts and analysts believe the precipitous drop to be the result of delayed processing and procedural changes in light of last year's robo-signing scandal.
The big picture here is that while some homeowners are benefiting by living rent-free for an extended period of time, we are far from out of the woods. As I have previously described on this blog, there is a large inventory of "shadow foreclosures" - meaning homes that actually have been through the foreclosure process already, but banks are being slow and cautious in bringing them to market. We also could see an uptick in foreclosure filings at any moment if the experts and analysts are correct in assuming that the drop was attributable to procedural/process-related events.
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