Banks Seized 100,000 Homes In September

Though mortgage servicers are under increasing pressure from state officials and consumer groups to suspend foreclosures, the pace of foreclosures only gained momentum last month.

For the first time since the housing crisis began, the number of homes seized by banks topped 100,000 in September, according to real estate data firm RealtyTrac. October's numbers, however, are expected to reflect the temporary foreclosure moratorium some lenders have already imposed.

Lenders took possession of 102,134 properties in September. The number of foreclosure filings, which includes a number of different actions, rose above 300,000 for the month, three percent higher than August's numbers and up one percent from September 2009.

"We expect to see a dip in those bank repossessions in the fourth quarter as several major lenders have halted foreclosure sales in some states," said James Saccacio, CEO of RealtyTrac.

Nevada still suffers most

 Once again, Nevada had the highest foreclosure rate in the nation. Arizona was second, followed by Florida, California and Idaho.

 For the third quarter, RealtyTrac reports 930,437 foreclosure filings, an increase of four center over the second quarter but one percent lower than the third quarter of 2009. According to the firm, one in every 139 homes received a foreclosure filing of some sort during the third quarter.

 What the fourth quarter looks like depends on how quickly banks can resolve the current documentation issue, Saccacio says. Failure to resolve it quickly, he says, could have a "chilling effect" on the entire industry.

States investigate

 Wednesday all 50 states announced a joint effort to stop mortgage loan servicers from allegedly submitting affidavits or signing notices that appear to have procedural defects of either a judicial or non-judicial foreclosure.

At issue is the allegation that many mortgage documents have been signed without personal knowledge of the facts asserted in the documents. In addition, Florida Attorney General Bill McCollum says it appears that many affidavits were signed outside of the presence of a notary public.

 "This process of signing documents without confirming their accuracy has come to be known as 'robo-signing' and is in direct violation of Florida law," McCollum said.

 The issue of "robo-signing" is getting nationwide scrutiny since a mortgage official for GMAC Mortgage testified last month he did not always read and sign affidavits as required by law. A Florida foreclosure defense attorney released depositions this week revealing many of the people hired to sign foreclosure documents had no training. Some, said attorney Peter Ticktin, couldn't even define what an affidavit was.

 McCollum has focused part of his investigation on the Law Offices of David J. Stern, which allegedly provided "robo-signing" services for a number of large servicers. Stern has gone to court to try to block the attorney general's probe. A Broward County judge is expected to rule on the motion shortly.

 The multistate group, led by Iowa Attorney General Tom Miller, plans to speak with all relevant mortgage servicers as soon as possible to determine whether or not each company has improperly submitted affidavits or signed notices in support of a foreclosure in the states.