Bank Repossessions Up, But New Foreclosures Decrease
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- Kirk Haverkamp | Thu, 07/15/2010
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RSSThe number of homes lost to foreclosure hit a new high in the second quarter of the year, even as the total number subject to the foreclosure process declined, according to new figures released today.
Nearly 270,000 U.S. homes were repossessed by banks in the second quarter of 2010, according to the foreclosure data firm RealtyTrac, an increase of 5 percent from the previous quarter. The figures represent a new quarterly high for the report and an annual increase of 38 percent from the second quarter of 2009.
Lenders holding off on new foreclosures
At the same time, the total number of properties subject to foreclosure actions of all types has been declining, with fewer homes subjected to initial notices of default or scheduled foreclosure actions. The company attributes the trend to lenders deferring foreclosure actions against delinquent homeowners while pursuing loan modifications or short sales.
Despite the record level of repossessions, total foreclosure actions of all types – default notices, scheduled auctions and bank repossessions – were down nearly 4 percent in the second quarter of 2010, affecting more than 895,000 properties.
Much of that decline occurred in June, with total foreclosure actions down nearly 3 percent from May’s figures and 7 percent from June 2009. Even so, the 313,000 properties subject to foreclosure marked the 16th consecutive month that total foreclosure actions exceeded 300,000.
Two opposing trends
“The second quarter was a tale of two trends,” said James Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.”
The company predicts that more than 3 million U.S. properties will be subject to foreclosure actions during 2010, with more than 1 million bank repossessions by year’s end.
“The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market,” Saccacio said.
One in 78 subject to foreclosure
A total of 1.65 million properties were subject to foreclosure actions in the first half of the year, which works out to 1.28 percent of the total housing market, or one home in 78.
Nevada continued to have the nation’s highest foreclosure rate during the first six months of 2010, despite declining foreclosure activity, with one home in 17 receiving at least one foreclosure filing. Arizona and Florida followed with rates of one in 30 and one in 32, respectively.
California continued to have the highest total number of properties subject to foreclosure, with 341,000 properties receiving a foreclosure in the first half of the year. California has also seen declining foreclosure rates, with foreclosure actions down 15 percent from the second half of 2009.
Florida was second with 277,000 properties subject to foreclosure in the first six months of the year, representing a 9 percent decline from the second half of 2009.
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