Foreclosures fell in November in Hampton Roads

Foreclosures in Hampton Roads fell steeply last month after the nation's largest mortgage company halted foreclosure proceedings in the region, according to a report to be released today.

The number of foreclosure auctions and repossessions in Hampton Roads fell to 1,162 in November, down nearly 31 percent from October but still 30 percent higher than the 89 2 reported in Nove mber 2009, according to RealtyTrac, a foreclosure-monitoring service based in Irvine, Calif.

In Hampton Roads, RealtyTrac tracks notices of foreclosure auctions and notices of a lender repossession, which occur if the property isn't sold at auction.

In recent months, Bank of America, along with several of the country's largest mortgage companies, suspended foreclosure proceedings in some states after questions were raised about how the institutions had handled foreclosure paperwork. The foreclosure moratorium was initially limited to the 23 states that require court approval to repossess homes.

Virginia and North Carolina were not included in the initial moratorium, but Bank of America eventually extended it to all 50 states. The bank announced last week it would resume foreclosing on properties across the country.

The decline in foreclosure activity was reflected across the country, where foreclosures declined 21 percent in November, according to the report.

The RealtyTrac report comes just days after Congress released a study criticizing the Treasury Department's foreclosure prevention program, the Home Affordable Modification Program. The initiative was supposed to prevent more than 8 million foreclosures but is on track to prevent just a fraction of that, according to the report by the Congressional Oversight Panel.

The panel blamed the problems, in part, on mortgage companies not being held accountable for losing paperwork and often having an incentive to foreclose rather than modify problem loans. "Because the costs associated with servicing a delinquent loan often exceed the revenues that a servicer can generate from the same loan, it may be in the servicer's interest to move to foreclosure as soon as possible," the panel wrote in its report.

Luanne Gallagher, who oversees Catholic Charities' foreclosure counseling program in Virginia Beach, said the Treasury Department's program can be frustrating at times.

"From the investor standpoint, it really is a business decision," she said. "So they're looking at whether the program offers a good enough return on investment, or whether foreclosure would be better."

Gallagher said the mortgage companies - which work as middlemen between the homeowner and the investor - constantly lose paperwork. "It's the frustration of continually trying to get information from the servicer, always interacting with different people," she said. "Those people who get the trial modification and are persistent in making sure they stay in touch with the servicer are probably the most successful."

Percentage of homes in Foreclosure | Source: RealtyTrac