After rising over 30% a year for the past four years, foreclosure starts will finally begin to decline nationally next year according to UFA LLC, a risk management firm that forecasts mortgage and consumer loan performance by ZIP code.

A slowing of house-price depreciation, a reviving economy, tighter underwriting of recent loan vintages and burnout of the worst vintages from three to five years ago will make the improvement possible, said Dennis Capozza, a professor of finance with the Ross School of Business at the University of Michigan and a founding principal of UFA in Ann Arbor, Mich.

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