Foreclosures decreased by 8.4 percent – or 130,000 – in 2011, according to research by CoreLogic.
“The pace at which properties are entering foreclosure is slowing,” Mark Fleming, chief economist with CoreLogic, told CNNMoney. “(Even though) servicers nationwide stepped up the rate at which they were able to process distressed assets.”
So why are foreclosures dropping?
For one, lenders are more cautious. Homes are entering the foreclosure process more slowly as lenders carefully scrutinize paperwork before processing a foreclosure after getting into big trouble for mishandling some foreclosures in recent years.
Also, with today’s stricter credit conditions, lenders are choosier about approving loan applicants, reserving approvals for mostly low-risk borrowers with a lower chance of default and foreclosure.
Banks are also doing more loan modifications to prevent foreclosures. And when a home does land in foreclosure, banks try to process them faster or encourage a short sale.