Last week, RealtyTrac released a somewhat positive report on the current state of the foreclosure crisis: In 2011, foreclosure activity in the United States declined by thirty four percent from the previous year.

According to the report, the number of homes that entered the foreclosure process was roughly 1.9 million, the lowest figures since the Great Recession began back in 2007. In addition, foreclosure filings - notices of default and auction notices - reached 586,133 in the fourth quarter of 2011, a 27 percent decrease from the fourth quarter of 2010.

RealtyTrac identified government investigations and the foreclosure freeze -- instituted by major mortgage lenders following revelations that they may have relied upon faulty procedures and/or deficient information to foreclose upon thousands of homes -- as one of the contributing factors for the decline in foreclosure/foreclosure filings.

Specifically, these lenders re-filed thousands of foreclosures in state court systems and reviewed pending cases for errors throughout all of 2011, creating a sizeable foreclosure backlog in the process.

"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, RealtyTrac CEO.

However, as these legal issues continue to be resolved and more foreclosures begin to make their way through the system, the number of foreclosures will likely begin to climb this year.

"We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010," said Moore.

The RealtyTrac also report found that Arizona had the second highest foreclosure rate in the nation for the third year in a row, as almost 114,000 homeowners received at least one foreclosure notice in 2011. (This translates into one in every 24 Arizona households receiving a foreclosure notice.)

However, it must also be noted that the number of foreclosures in Arizona dropped by 14 percent in 2011, while the number of homeowners who received a foreclosure notice dropped by 27 percent in 2011.

If you are facing foreclosure, you should strongly consider contacting an experienced bankruptcy attorney to learn more about your rights and your options under Chapter 13 bankruptcy.

This post is for informational purposes only and is not to be construed as legal advice.

Stay tuned for further developments from our Phoenix bankruptcy blog ...

Sources:

Bloomberg Businessweek, "2011's foreclosure rate lowest since pre-recession" Jan. 12, 2012

Mohave Daily News, "Arizona foreclosures drop by 14 percent in 2011" Jan. 12, 2012