Foreclosures Hit a Five-Year Low

Home prices are coming back up and foreclosures are falling. Here’s why.

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USA Today reports the frequency of foreclosures is falling…

Foreclosure activity has been dropping for nine consecutive quarters. There were expectations it would pick up this year following a mortgage servicing settlement earlier this year between big lenders and federal and state officials.

That hasn’t happened. Instead, home prices have been rising, up 4.6 percent in August from a year ago, CoreLogic says.

There are several reasons, according to USA Today: Foreclosing is now a slower and more complicated process in some states, less-damaging short sales are often happening instead of foreclosures, and more people are keeping up with their payments thanks to a recovering (however sluggish) economy.

Despite the overall trend, many states still have a huge inventory of foreclosures to work through, including Florida, New York, New Jersey, and Illinois.

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