Foreclosure filings drop 17 percent last month

The investigation into the practice, known as "robo-signing," where managers signed off on foreclosure paperwork without properly reviewing the documents, began in October. Several large banks, including Bank of America, halted foreclosures in all 50 states to look into their procedures, especially in states where courts handle proceedings.

The White House urged lenders to move quickly to complete the investigation to avoid a backlog of foreclosures that would hurt the housing market. 

Foreclosures are expected to reach a peak while prices bottom out this year as the nation's housing crisis trudges into its fifth year. 

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Lenders repossessed more than 1 million homes in 2010, up 14 percent from the previous year and the most since 2005, according to RealtyTrac.

Foreclosures could rise by 20 percent this year, while prices will likely drop by 5 percent as the market begins to make a turn toward recovery. 

In January, default notices fell to 75,198, a drop of 1 percent from December and 27 percent from a year earlier, the lowest monthly total since July 2007. 

Defaults have declined for 12 straight months on a year-over-year basis, and sequentially for four months, according to RealtyTrac.

Lenders foreclosed on 78,133 U.S. properties in January, up 12 percent from the previous month but still down 11 percent from January 2010. 

Bank repossessions in non-judicial foreclosure states increased 23 percent from December but were down 9 percent from January last year, while bank repossessions in judicial foreclosure states decreased 7 percent from the previous month and were down 16 percent from January 2010.

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With 67,072 properties receiving a foreclosure filing, California accounted for more than 25 percent of the national total in January.

After hitting a 25-month low in November, California foreclosure activity has increased on a month-over-month basis for two straight months.

Five states had more than half of the nation's filings in January, led by California’s 67,072, which accounted for more than a quarter of the nation’s total. After hitting a 25-month low in November, filings there have increased for two straight months.

Nevada had the highest foreclosure filing rate for the 49th straight month, one in 93 households, five times the national average. Home seizures in the state rose 16 percent from December.

Florida foreclosure activity decreased on a month-over-month basis for the fourth straight month, but the state’s 21,671 properties receiving a foreclosure filing in January, a 42-month low, was still the second highest in the nation.

Michigan foreclosure activity increased for the second straight month, and the state posted the nation’s third highest total, with 16,716 properties receiving a foreclosure filing in January.

Arizona posted the nation’s fourth highest total, with 15,757 properties receiving a foreclosure filing, while Texas posted the nation’s fifth highest total, with 14,897 properties receiving a foreclosure filing during the month.

Other states with foreclosure activity totals among the nation’s 10 highest in January were Illinois (13,164), Georgia (12,772), Nevada (12,263), Ohio (8,924) and New Jersey (5,526).