Industry NewsMortgage

Foreclosures spiked before robo-signing scandal

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Banks scaled back loan modifications and stepped up foreclosures during the third quarter, with foreclosure starts and completions both up sharply from the previous three months, a new report by banking regulators shows.During the three months ending Sept. 30 -- before the robo-signing controversy was in full swing -- the number of foreclosure starts was up 31 percent from the previous quarter, to 383,000. Another 187,000 homes completed the foreclosure process, a 15 percent increase from the second quarter and up 57 percent from a year ago.(Foreclosures are considered completed when ownership of a home transfers to loan servicers or investors.) The quarterly report, from the Office of the Comptroller of the Currency and the Office of Thrift Supervision, is useful for spotting trends, but understates the total number of foreclosures because it covers only about two-thirds of first-lien mortgages.The report showed loan servicers approved 470,321 home retention actions during the third q...