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Foreclosures off from peak

Filings are down, but can it last?

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Foreclosure-related filings fell 7 percent in November, in part because of state laws that prolong the foreclosure process and more aggressive efforts by lenders to modify the loan terms of some troubled borrowers, data aggregator RealtyTrac said today. The drop in filings may only be a lull, RealtyTrac said, citing a recent report by the Mortgage Bankers Association that the delinquency rate for loans not yet in the foreclosure process climbed to a record 7 percent during the third quarter. The MBA projects 2.2 million homes will enter the foreclosure process in 2008, and that layoffs and the worsening economy could increase that number next year (see story).Another indication that foreclosure filings may be headed back up: Data collected by federal bank regulators shows more than half of borrowers who were granted loan modifications during the first quarter had re-defaulted after six months. Many of those delinquencies could turn into foreclosures next year, said RealtyTrac CEO James...