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More than 230,000 mortgages began the foreclosure process in January, a 28 percent increase from December, as banks figured out how to process the paperwork more efficiently and quickly.
The statistics come from Lender Processing Services, which also reports that failed loan modifications or attempted modifications accounted for 47 percent of the loans heading into foreclosure.
The surge in foreclosure activity was expected following the bank scandal involving robosigning, where officers pushed paperwork through without reviewing it. As the banks developed a new, streamlined process in the wake of the revelations of wrongdoing, thousands of foreclosures were stalled.
"This large amount of foreclosures that have been sitting out there, with borrowers not making payments for an extended period of time, this may be coming to an end," Herb Blecher of Lender Processing Services told CNBC. He believes this will help jump-start a housing recovery as delinquent properties are finally removed as bottlenecks to a healthy market. Currently, there are 4 million properties in some stage of delinquency that haven't entered the foreclosure process yet. It will be a while before they work through the system, but look for an increasing number of foreclosures to hit the market in the coming months.
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