Regional mortgage foreclosure activity declined slightly in 2012, compared to the prior year, according to a Los Angeles-area company that tabulates data on property loan defaults.
Bank repossessions, property auction notices and mortgage default warnings decreased by 4 percent last year in the Scranton/Wilkes-Barre metro area, according to RealtyTrac, a nationwide real estate monitor.
The drop was substantially smaller than the 52 percent decrease in regional foreclosure activity RealtyTrac reported in 2011, compared to 2010.
But only three of the state's 14 metro areas experienced decreasing foreclosure activity in 2012 - Scranton/Wilkes Barre, Erie and State College. Statewide, foreclosures in 2012 increased by 28 percent, according to RealtyTrac, and property repossessions nationwide dropped by 3 percent.
Foreclosures in the region have been decreasing since the end of 2010, RealtyTrac statistics indicate.
In a parallel development, new case filings in 2012 at the U.S. Bankruptcy Court office in Wilkes-Barre dropped by 11 percent from 2011.
Sheriff's sales of foreclosed properties in 2012 in Lackawanna County totaled 226, a 39 percent decrease from 372 in 2011, according to county records. Sheriff's sales in Luzerne county dropped by 7 percent to 464, county data show.
"I think the economy as a whole has stabilized and that would be reflected in foreclosures," said Mark Conway, a Dunmore lawyer who handles bankruptcy and real estate cases. "It doesn't mean the economy is better. It's just stabilized."
Jesse Ergott, executive director at NeighborWorks Northeastern Pennsylvania, a nonprofit budget counseling agency in Scranton, said banks have scaled back foreclosure filings to prevent a glut of repossessed homes on the market.
"We have seen a slowdown," he said. "People are getting a little bit of a reprieve. They are not pushing them through as fast."
Despite the positive signs, sales of foreclosed homes in the area jumped by more than 90 percent in the third quarter of 2012, compared to the same 2011 period, according to RealtyTrac.
CoreLogic, a Los Angeles-area company that provides real estate and financial information, reported average single-family home prices in the region in October were down 1.7 percent from the year-earlier period. Excluding "distressed" sales, for urgencies such as foreclosure or divorce, home prices in the region increased by 7.5 percent over the October 2011 average, CoreLogic reported.
Michelle Valvano, who heads the foreclosure sales division at Classic Properties in Clark Summit, said she sold about 65 repossessed homes in 2012 in Lackawanna, Luzerne, Monroe, Pike and Wayne counties, up from about 50 in 2011.
She said banks pressure more delinquent mortgage holders into "short sales," where the proceeds of the property transaction do not cover the balance of the mortgage, but the homeowner's debt is wiped out.
"It costs a lot less to do a short sale than to foreclose on the individual," she said.
She also sees more activity among investors purchasing multiple foreclosed homes.
"A lot of properties have been pulled (from the market) because they are not selling," Ms. Valvano said. "They go into pool sales, where an investor group is buying a bunch at once."
Mr. Conway, though, said banks are trying to avoid more foreclosures by extending options to delinquent debtors, including interest rate reductions, lower principal on loan amounts and smaller payments over lengthier mortgage periods.
"The lenders - especially the larger national lenders - are making a more concerted effort to work in modifications and pre-foreclosure workouts with borrowers," he said.
Contact the writer: jhaggerty@timesshamrock.com