Foreclosures rise in Pa. after robo-signing settlement

Greater Philadelphia-area foreclosures have soared in the first quarter. The number of homes caught up in the process in the region were up 36 percent in the first few months of 2012, compared to the end of last year.

In February, U.S. states reached a $25 billion settlement with the nation’s five largest mortgage servicers. At issue: robo-signing — whereby large numbers of foreclosures were pushed through without adequate documentation.Foreclosures slowed during the negotiations brokered by states’ attorneys general. Now that the terms have been settled, foreclosure activity is up in a number of American metro areas. “As the negotiations with the attorney general wound down and eventually came to a resolution, a number of lenders who were holding back on foreclosures did go forward with them,” explained Irwin Trauss, with Philadelphia Legal Assistance.Homeowner advocates want settlement money to be used to restore Pennsylvania’s Home Emergency Assistance Program (HEMAP). The loan program for struggling homeowners had to stop taking applications in July. The state program established in the 1980s only survived as long as it did with federal funding.Patty Hasson works with homeowners at nonprofit financial advisor Clarifi. She thinks the loss of HEMAP loans could have contributed to more properties falling into foreclosure.”Many people who received assistance from [HEMAP], either receiving the actual loan to help them bring their mortgage current or who were referred to a housing conselor where they got guidance or support to stay in their homes are no longer getting that help,” Hasson said.

Trauss disagreed, saying he thinks any increase attributable to HEMAP would be relatively small. Only a small percentage of Pennsylvania homeowners received loans from the program.

Meanwhile, Pittsburgh had the highest increase in foreclosure activity of the top 50 metro areas, at 49 percent.