While foreclosure listings still take up plenty of space in local newspapers, local attorneys, real estate agents and bankers are beginning to see signs of a rebound in the housing market and the economy as a whole.

"Most of the foreclosures that local financial institutions have been facing were most of the construction speculative real estate, and most of that's already been foreclosed and written off some time back," John Evans, with American Trust Bank of East Tennessee, said.

"So, local financial institutions have seen a pretty good drop in foreclosures simply because they don't have the range of residential mortgage loans that they had at one time," he said.

He added that some lending companies were hesitant to foreclose on homes because they don't want to add even more inventory to their holdings.

"There are still a lot of these mortgage companies that are holding back on foreclosing on folks just because they've had such a glut over the years on foreclosures," Evans said.

Evans added that he knows of some residents who are nine months behind on their payments and still have not been foreclosed on.

Elusive figures
According to a report from CoreLogic, a national research and data collection agency, Tennessee experienced 24,730 completed foreclosures in January compared with 25,806 in April. Nationally, foreclosure rates have declined by more than 10,000 since last year, from 77,000 in May 2011 to 63,000 in the same month this year.

"Since the financial crisis began in September 2008, there have been approximately 3.6 million completed foreclosures across the county," according to the report.

Harvey Sproul, an attorney in Loudon, indicated that without manually counting the number of property auction listings and comparing various months and years, there wasn't a hard-fast way to track foreclosure rates on the local level.

"You would have to actually count the ones that have been publicized over the last three or four years, so it's going to be kind of a guess," Sproul said.

He said that attorneys in Loudon County typically don't work foreclosure defense cases, noting that most of those are handled at the regional level.

"A lot of it goes back to Fannie Mae ... where these mortgages that were done back in 2004, '05, '06 and '07 before everything hit were being insured by Fannie Mae, and that's one of the reasons why everything almost toppled into a depression is because there were so many of those," Sproul said.

"And if the government didn't step in and save Fannie Mae and other governmental institutions that had been guaranteeing these mortgages, then we were in trouble."

He said the majority of foreclosure defense cases were handled by substitute trustees out of either Knoxville or another city in the state.

Daniel Moore, of Woolf, McClane, Bright, Allen & Carpenter, in Knoxville, served as the substitute trustee in a recent public auction at the Loudon County Courthouse for property formerly belonging to Maryville developer Mike Ross. WindRiver Investments LLC put in the winning bid at $5 million for 180 lots at Rarity Pointe in Lenoir City. The company also bought a pair of lots that included 4,000-square-foot homes for $500,000.

Multiple messages left with Moore were not returned.

Five of the nation's largest lenders - Ally, Bank of America, Citi, JPMorgan Chase and Wells Fargo - and attorney generals from 49 states and the District of Columbia recently reached a $25 billion settlement that could drastically reduce the mortgage payments of 2 million borrowers. The deal was made to settle charges of foreclosure processing abuse that dated back to 2008.

'Paper tiger'
Knoxville attorney Brent Snyder, who has worked bankruptcy cases for 12 years, said he has seen only modest changes in local foreclosure rates.

"I wouldn't say it's slowing down," Snyder said. "Maybe a little bit just the natural ebb and flow of things especially after the attorney generals' ... big settlement."

"If you look in the paper every week they have tons and tons of listings," Snyder added. "I don't know the numbers off hand. The Chapter 13 practice is still booming as far as I can tell, although bankruptcies have kind of slowed down as a whole. They're down from last year, but they're still definitely up there."

Snyder said he has seen residents get into financial trouble after lenders offer mortgage modifications. He recommended that property owners take a hands-on approach regarding their mortgages.

"The first thing to do is, of course, stay in touch with the mortgage companies and see if they can work anything out," Snyder said. "The problem has been for a long time what I've seen time and time again is people apply for these modifications, and they're told they're going to get them or told it's being reviewed, and the next thing they know, they're being foreclosed upon."

Tennessee is among more than 25 other states that operate under a non-judicial type of foreclosure policy, in which mortgage companies do not have to take a person to court in order to foreclose on a piece of property.

He said that in this state, lenders were only required to run a notice in the newspaper for three weeks in order to take action, whereas in states like Florida or New York, a large foreclosure defense industry exists because in those states, lenders have to take property owners to court in order to foreclose.

"I guess the companies seem more interested in doing modifications now, but what I see time and time again is people get real frustrated," Snyder said. "They'll send the same documents repeatedly. These people have sent packages and packages to these companies, and they'll say, 'We didn't get it, or we can't find it. Resend it.' It's constant. So, hopefully with the big settlement, they'll be some changes coming down the pipeline that will help people."

While he was hopeful that some changes would happen in the mortgage industry after the large settlement, he described the process as a "paper tiger."

"Because it's all internal review and what not," he said. "Everybody that was foreclosed on is supposed to be able to get everything reviewed and see if it was done right.

"... Hopefully that's going to give borrowers some options, but they haven't been really able to do anything, and there's really no teeth to it because it's all internal. It's all up to the companies to do it themselves and say whether you qualify for a modification or not."

He said one of the best tools in Tennessee for people to restructure their finances and get a fresh start is Chapter 13 bankruptcy. He emphasized the importance of paying attention to correspondence about their mortgage payments.

"I will get phone calls that people are getting evicted by the mortgage company, and they didn't even know they had been foreclosed on," Snyder said. "So, you know things like that do happen, but a lot of times people when they get into debt problems, it's normally more than just the mortgage. They start getting phone calls and letters, and they just kind of hide from everything, and you can miss something really important."

Loren Plemmons, an attorney in Tellico Village, said she mostly works with property owners interested in purchasing foreclosed property. She said that while foreclosures in the Village were not prevalent, they do occur.

Through working with real estate agencies and lenders, she has seen some improvement in the housing market.

"Primary, that's what I see is where the banks had to purchase their own notes back at the foreclosure sell on the property, and now the real estate market seems to be gaining a little steam and some of those are selling," Plemmons said. "We've got room to grow though."