This just in: foreclosures dropped 9% nationally in October.

At first glance, this sounds like it would be good news right? A closer look however, will show that it all seems to directly relate to the freeze in foreclosures from the robo-signing scandal. Last month, when it came to light that many of the Banks Loss Mitigation Departments had not properly reviewed foreclosure documents, there was a lot of pressure on banks to suspend foreclosures.

Initially, many banks did just that which, in turn, interrupted scheduled closings of foreclosed properties. After two weeks however, many banks decided that they had properly reviewed their procedures and felt confident that they had taken the appropriate steps to right “their wrongs.” Soon after, the foreclosures resumed.

Now, the news is telling us that there has been a national drop in foreclosures. With all of the updates, confusion is bound to follow. So, what impact will this have on buyers going forward?

Even though these freezes were short lived I imagine that many buyers would think twice about purchasing a foreclosed property. There are still implications on the Title Insurance side as many insurers are asking more questions before agreeing  to issue Title Insurance policies on purchases of foreclosed homes. This also brought to light the need for all buyers of foreclosed homes to request Owners Title Insurance to protect themselves as well as the Lender in ensuring clear title to the property.

There still may be a downturn in foreclosures into November as some banks were slower to resume foreclosure activities. Unfortunatley, it will still be awhile before the drop in foreclosures truly are the result of less foreclosure activity.