Everyone had hoped that the California market would recover this   year. After all, there were fewer foreclosures in California last year.   There was a 14 % dip in foreclosure filings. Across the nation, there   has been a 2 % hike in foreclosures. Across the nation, 2.9 million   houses were in foreclosure in 2010. This has been more than 2 % more   than ’09.

The vice-president of RealtyTrac, Rick Sharga, said that the   foreclosure numbers across the nation could have been higher. It is not   so because many banks had stalled foreclosure activities last year when   they became embroiled in allegations that they took over homes without   verifying the documents properly. Attorneys of various states asked for   an investigation into the matter. Now many banks will again resume   foreclosure activity. Then foreclosures would again see a spurt.

This delay has made the numbers skewed. Sharga is of the opinion that   another quarter million homes would have faced foreclosure activity had   it not been for the foreclosure delays. It may be pointed out here that   banks like JP Morgan Chase, Ally Financial and Bank of America had put a   cap on foreclosure-related activity. Bank of America even declared a   freeze on foreclosures nationally. It, however, lifted the freeze late   last year.

According to analysts, it is Bank of America that is responsible for   low foreclosure sales in California and now a sharp increase this year.   What remains to be seen is how banks will handle foreclosures this year.

Another recent trend is that homeowners whose properties have been   lost to foreclosures are challenging the process in courts. Even   Massachusetts highest court ruled that two foreclosures were invalid.   The banks, in this case, US Bank and Wells Fargo could not prove that   they were the mortgage owners.

This is a significant case. This is the first instance when Supreme   Court of a state had ruled in favor of a homeowner on a title issue.   Speaking on behalf of attorney general of California, Kamala Harris said   more such cases will be shifted to California this year.

Sean O’Toole,   the CEO of ForeclosureRadar said, “We have now officially begun the   litigation phase of the foreclosure crisis. Attorneys will likely be the   biggest winners in the foreclosure business for 2011.” Almost 4 per   cent of homes were in some phase of foreclosure activity in 2009.   Experts said that unless there is improvement in the job scenario,   foreclosures would not abate.