</p

Khater says that there are severalrninter-related factors behind this increase.  The robo-signing that servicers were engagedrnin was discovered in September of 2010 and many banks put an immediaternforeclosure moratorium in place to investigate. rnBy October the number of completed foreclosures which had been risingrnrapidly before the news broke dropped by one third.  Even after the moratoria were lifted manyrnservicers proceeded more cautiously in the process and the number of bank-ownedrnproperties did not begin to rise again until late 2011/early 2012 when thernNational Mortgage Settlement provided servicers with more clarity onrnforeclosure standards.    </p

Coinciding with the widespreadrnresumption of foreclosures was an increase in demand on the part of investorsrnwhich more than offset the growing inflow of properties.  That demand began to drop off in the fall ofrn2013 as rising home prices and mortgage rates made REO investment lessrnattractive.   Short sales, which had diverted manyrnproperties out of the foreclosure stream, peaked in early 2013 and began torndecline, a drop that was accelerated at the beginning of this year whenrnCongress failed to reauthorize the Mortgage Forgiveness Debt Relief Act ofrn2007.  </p

Khater said that while the level of REOrnproperties is below the peak it reached during the crisis we can assume thatrnthe rapid improvement that led to the trough in the inventory last summer isrnover and the market has entered a new phase as it continues to work through thernlegacy of the housing crisis.

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