Foreclosures Drop For Three Straight Months

Good news for the housing economy? Sure, but I am not sure how significant it is. All the fundamentals driving up foreclosures are still in force. Yes, we've got tax credits for buying new homes. We have Obama's mortgage modification plan. Yes, banks don't want to flood the home market with foreclosed homes, so they're holding on to their properties, making deals with depressed home owners, and doing everything they can to keep foreclosures down.

Home sales across the nation are down.

What are the fundamentals driving foreclosures? Unemployment, risky mortgages and negative equity. Depressed home values means it makes more economic sense for people to walk away from their homes and allow banks to foreclose.

The Los Angeles Times reports:

The number of foreclosures dropped in October for the third consecutive month, a sign that efforts by banks to take back troubled properties may be easing, according to a report out this morning by RealtyTrac.

The number of foreclosures — default notices, scheduled foreclosure auctions and bank repossessions — was down 3% in October from September, though that number is still 19% higher than in October 2008.

One out of every 385 housing units in the U.S. received a foreclosure filing in October, according to the report. The dip in the number of filings was a positive sign. But James J. Saccacio, chief executive officer of Irvine-based RealtyTrac, said in a statement that the moribund economy and the potential pitfalls facing the housing market could imperil any housing rebound.