Foreclosure filings hit a three-year low

Foreclosure filings plunged to a three-year low in Hampton Roads last year after reaching record highs in 2010, according to a report to be released today.

The number of properties with at least one foreclosure filing fell to 6,988 in 2011, down 45 percent from the 12,815 properties with a filing the previous year, according to RealtyTrac, a foreclosure-monitoring service based in Irvine, Calif.

Last year was the first time since RealtyTrac began collecting foreclosure data in 2005 that the annual number of local properties with a foreclosure filing has declined year-over-year, suggesting that the problem might be easing.

"We're definitely through the worst of it," said James Koch, an economist at Old Dominion University.

Some of the improvement is because of the local economy, which seems to have stabilized, Koch said.

"I'd say this is sort of a fragile improvement," he said. "So I think things will be very sensitive to what goes on in Europe or any potential cuts in defense."

Other factors also are working to curb the level of foreclosures, Koch said. "I think there's now more of a tendency for banks to work through things," he said, referring to lenders offering struggling homeowners options such as modifications or short sales.

He also attributed part of the decline to banks having already foreclosed on the majority of the most-troubled homeowners.

"If you think about it, probably the people who were most underwater were most likely to default," he said. "But after a certain period of time, you're likely to work through them."

In December, lenders issued 812 foreclosure-related notices, up 28 percent from the 635 issued in November and but down 19 percent from the 1,004 reported in December 2010, RealtyTrac reported.

Foreclosure activity also fell 34 percent nationwide in 2011 as 1.9 million properties received notices. It's the lowest level of foreclosure activity since 2007.

Brandon Moore, RealtyTrac's CEO, attributed the decline last year to delays and errors in the processing of foreclosures.

"There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets," he said in a news release. "We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010."

Dotty Acampora, a foreclosure-prevention counselor at the Virginia Beach Community Development Corp., said she's also seen a decline in the number foreclosures being processed in the past year.

"The only thing I can attribute that to is that maybe the banks are doing more short sales and more successful modifications," she said. "So the outreach is starting to work."

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com