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Tuesday, July 16, 2024

Foreclosures surge


The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments.

Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.

Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis.

Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market.

The number of properties receiving an initial default notice — the first step in the foreclosure process — rose 1 percent last month from June, but tumbled 28 percent versus July last year, RealtyTrac said.

Initial defaults have fallen on an annual basis the past six months.

The latest data reflect a foreclosure crisis that continues to drag on as many homeowners struggle to make their monthly payments amid high unemployment, slow job growth and an uneven rebound in home prices.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure.

That program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009.

Still, RealtyTrac estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

In all, 325,229 properties received a foreclosure-related warning in July, up 4 percent from June, but down 10 percent from the same month last year, RealtyTrac said. That translates to one in 397 U.S. homes.

The firm tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

Among states, Nevada posted the highest foreclosure rate in July, with one in every 82 households receiving a foreclosure notice. The number of properties in Nevada receiving a foreclosure warning last month rose nearly 7 percent from June, but fell nearly 30 percent from the same month last year.

Rounding out the top 10 states with the highest foreclosure rate last month were: Arizona, Florida, California, Idaho, Michigan, Utah, Illinois, Georgia and Maryland.

Las Vegas continued to be the city with the highest foreclosure rate in the U.S., with one in every 71 homes receiving a foreclosure notice in July — more than five times the national average.

Copyright © 2010 The Associated Press

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3 thoughts on “Foreclosures surge”

  1. It looks like all the cash the banks have amassed from the Fed will be going into “owning” those foreclosed homes, given the precarious nature of the greenback. Better to have capital assets than accounts receivable, eh?

  2. It is beyond time to start making it financially painful for banks to choose to foreclose rather than work with homeowners to adjust their loans. Right now banks have no reason to avoid foreclosure. They get the property, which they can sell, they get an insurance payout to cover the balance of the loan, they get a tax write-off for their “losses”. Forcing families into the streets is a money maker for them. None of the “financial reform” that has come out of Washington addresses the basic failings of the current system and in some cases, have only made it worse.

    • Get a grip, are you for real, they bought a home they knew they couldn’t afford and now want a bail out. Many of these clowns felt they would buy a home and hold onto it until there interest rate kicked up and then sell at a profit. When that didn’t happen they cry because they are under water with many just walking away. Talk about a lack of integrity, I hope the lenders hound them forever as they deserve no sympathy from us and they definately do not deserve any government help!!!

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