Banks ease up on foreclosures amid increased scrutiny

By Stephanie Armour and Julie Schmit, USA TODAY

In the Florida courtroom of Chief Judge Victor Tobin, there's been a marked change the past month in the pace of foreclosures that mortgage companies ask him to approve.

Tobin had been handling up to 200 cases a day in which delinquent borrowers weren't contesting mortgage servicers' motions seeking court approval to repossess their homes. Now, it's about 50 a day.

That's not the only difference the state judge has noticed in the wake of revelations since September that some mortgage servicers did not follow legal procedures in tens of thousands of foreclosures. In contested cases now, servicers are filing new affidavits stating that they or their lawyers have reviewed supporting documents — language missing in prior affidavits, says Tobin, chief judge of the Broward County Circuit Court.

METRO AREAS: Foreclosures rise in large U.S. cities.
INTERACTIVE MAP: Foreclosures by state.

He expects the case load to rise again in eight to 10 weeks, but for now, the mortgage industry's foreclosure machinery in Broward and other jurisdictions around the nation has slipped into a slower gear. Amid state and federal investigations into how homes are being taken away from delinquent borrowers, some judges are turning more critical eyes on foreclosure cases in the roughly 23 states where court approval is required, and some states such as New York and Maryland have adopted new rules to ensure they get a closer look. Meanwhile, heavy media coverage about foreclosure errors is encouraging more homeowners to hire lawyers to challenge foreclosure actions.

With more than 1 million homes in some stage of foreclosure, the pace of completed foreclosures could be slowed for months.

There's little question that the controversy has had an impact. It is at least partly responsible for a 6% drop in scheduled foreclosure auctions, to about 114,000, in the first 25 days of October compared with Sept. 1-25, according to RealtyTrac, a firm that collects data on foreclosure activity around the country.

"We're seeing a dramatic decrease in the number of (new) cases being scheduled and an increase in the number of foreclosure sales being canceled," says Circuit Court Judge Sandra Taylor, who handles cases in Tampa and in Key West, Fla.

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