In the wake of the recent multibillion-dollar settlement reached between the nation's largest mortgage lenders and a number of state attorneys general on behalf of households who were wrongfully foreclosed on, states that had temporarily reduced their foreclosure rates could soon see a surge in activity.
One such state is Nevada, which has maintained the highest foreclosure rate since the collapse of the housing market. However, the rate of foreclosure filings fell significantly in October 2011 as local state legislators passed lending regulation that added further obstacles for lenders participating in the foreclosure process. In September 2011, there were an estimated 5,000 foreclosures across the state, while in October, filings plummeted to 40 filings after legal action was taken to halt the activity.
With the passing of the financial settlement, industry experts anticipate foreclosure activity to see an upswing in the state.
"Bank and beneficiary representatives have indicated in recent weeks they will soon begin filing notices of default again in Nevada after a review of their documentation and the announcement of the federal agencies and state attorneys general historical mortgage servicing settlement in February," said deputy director of the Nevada foreclosure mediation program Verise Campbell.
Meanwhile, despite measures to prevent foreclosures in Nevada, real estate data shows that an estimated 60 percent of homeowners in the state are still underwater and are in danger of defaulting on their home loans.