More Properties Lost to Foreclosure

By:: Peter King | July 29, 2010

The number of U.S. homes in foreclosure continues to decline, even as the number of properties actually lost through the process is on the rise, according to figures released today by real estate data firm RealtyTrac.

Bank repossessions increased 5 percent in the second quarter of 2010 to nearly 270,000 homes, a record high for the report. Meanwhile, a decrease in both new defaults and auction notifications meant the total number of properties subject to foreclosure actions fell to 895,500, a 4 percent decline.

The contrasting trends were due to lenders clearing out a backlog of distressed properties where repossession had been delayed due to foreclosure prevention efforts last year, while fewer new properties entered the process as lenders pursued more aggressive loan modification and short sale efforts, according to James Saccacio, chief executive officer of RealtyTrac.

“The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions,” Saccacio said. “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.”

The numbers indicate that one U.S. home in 78, or 1.28 percent of all homes, were subject to at least one foreclosure filing in the first six months of the year.

Nevada continued to have the nation’s highest foreclosure rate, with one home in 17 subject to at least one filing, despite a 13 percent decline in foreclosures since the second half of 2009. California continued to have the nation’s highest total number of foreclosures in the first half of the year, nearly 341,000, despite a decline of 15 percent from the second half of 2009.

Of the 10 states with the nation’s highest foreclosure rates, Georgia saw an 11 percent increase in the first half of the year, Michigan an 8 percent increase and Utah a 2 percent gain. All three are up approximately 30 percent from the first half of 2009. The other seven states all showed declines in the first half of 2010.

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