Home Foreclosures Grow for Ninth Month in a Row

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Foreclosures soared in August, with banks repossessing more than 95,000 properties -- a 25% increase from the same month last year.Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac said Thursday.

In all, banks repossessed 95,364 properties last month, up 3% from July and an increase of 25% from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Repossession Rate Rises

Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can't afford to simply dump the properties on the market.

Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April.

That's one reason fewer than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac.

"These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer's market with too much distressed inventory for fear of what it would do for house prices," he said.

Fewer Initial Default Notices

As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer.

The number of properties receiving an initial default notice - the first step in the foreclosure process - slipped 1% last month from July, but was down 30% versus August last year, RealtyTrac said.

Initial defaults have fallen on an annual basis the past seven months. They peaked in April 2009.

Still, the number of homes scheduled to be sold at auction for the first time increased 9% from July and rose 2% from August last year. If they don't sell at auction, these homes typically end up going back to the lender.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

One in 381 Homes in Trouble

In all, 338,836 properties received a foreclosure-related warning in August, up 4% from July, but down 5% from the same month last year, RealtyTrac said. That translates to one in 381 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 last month, with one in every 84 households receiving a foreclosure notice. That's 4.5 times the national average.

Rounding out the top 10 states with the highest foreclosure rate in August were: Florida, Arizona, California, Idaho, Utah, Georgia, Michigan, Illinois and Hawaii.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures.

Mixed Success for Loan Mod Programs

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. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

The program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners since March 2009.

Regardless, many troubled borrowers have seen their efforts to get a loan modification stymied.

Larry Book of Winter Garden, Fla., was one packet away from a permanent loan modification from Chase under the Obama administration's foreclosure prevention plan after more than a year of back and forth and one failed attempt.

But his modification never went through. Instead, his loan was transferred from Chase to IBM Lender Business Process Servicers in July and he was told he owed $9,562.62 and must bring his mortgage current by Sept. 15 or foreclosure proceedings will begin.

"It just becomes too exhausting," Book said about the modification process. "That's why some people walk away. But I've invested too much and given up too much to just let it go."


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BILLY

Anyone got any ideas of anything you can say with i go to my court date on my foreclosures

September 17 2010 at 11:10 AM Report abuse rate up rate down Reply
mike

after 1/12 yrs of going back/forth with my lender, emptying college funds, 401k,savings etc and all along telling them I would eventually not be able to keep up, i now have missed my 1st payment. As I look back, trying to do the right thing has affected my childrens college future, my retirement, etc. I am in an interest only loan, so I am not surprised that they wanted as much as possible (my fault, i signed up ) But I now think I should have just stopped paying, sacked away the money, and let them do what they r going to do anyway...take the house. Doing the right thing isn't always the smartest thing. Sure am glad we bailed them out !!!

September 17 2010 at 6:38 AM Report abuse rate up rate down Reply
BILLY

Did not the federal goverment pay this companys off? why do they want to take more.Why are they allowed to double dip? Why are they allowed to take peoples homes?All they do is change there name after the goverment bail out and get paid for the same homes again.

September 17 2010 at 5:21 AM Report abuse +2 rate up rate down Reply
dterraman

banks guaranteed to not loose....all backed by the people

September 17 2010 at 4:51 AM Report abuse +1 rate up rate down Reply
BILLY

fanemay if forclosing on our home and can not even prove they hold the note on it.Bank of america says they do. County wide did have it but the feds shut them down due to fraud, We do not know what to do

September 17 2010 at 4:26 AM Report abuse +1 rate up rate down Reply
gitanesca

forclosed home, empty house, upkeep, property tax, sitting unsellable for who knows how long? Are banks going to let people rent to own? Will they wait until the houses get vandalized and then tear them down? There are too many empty houses to keep forclosing. It is bad business. At least if the bank customer is in the home some of the problems are avoided. Banking needs to think and act smarter. maybe not all homes could be refinanced closer to their actual value but there should be some that could have that as an option. Ofcourse it can't help everyone and that is "unfair" but so is life. Better to help some than none at all.

September 17 2010 at 2:06 AM Report abuse rate up rate down Reply
btlblwr

The banks are the only ones making big $$ these days, along with government workers. The worst part has been when we asked for a loan mod. BOA contacted our other debtors and immediatly our credit cards (which we were never late on!!) , lowered our availabilty, and the credit reporting agencies show we are behind on our payments when we have not been late on one house payment , we are just now paying the new modified amount. Somehow that does not seem fair. We are not asking to forgive our note, which we have never been late, or not paid, but asking for help lowering the payments for a while, since my wife is out of work right now, and my hours have been cut back... Thanks for nothing BOA!!!!

September 16 2010 at 8:40 PM Report abuse +3 rate up rate down Reply
LFunchesTSC

WATCH MY LIPS - HOWS THIS FOR AN EIGHT HUNDRED POUND GORILLA THAT NO ONE WANTS TO TALK ABOUT? THE CHICKENS HAVE COME HOME TO ROOST WITH A VENGEANCE. ALL THOSE MILLIONS OF JOBS THAT HAVE BEEN "OUT-SOURCED" TO CHEAP FOREIGN LABOR HAVE NOW CAUGHT UP WITH THE AMERICAN ECONOMY. YOU CANNOT COLLECT TAXES WHEN PEOPLE ARE NOT WORKING FOR DECENT WAGES. YOU CANNOT SELL HOMES WHEN PEOPLE HAVE NO STEADY JOBS OR INCOME. THE GOVERNMENT CAN FUND ALL THE PROGRAMS THEY CAN IMAGAINE BUT UNTIL THE PRIVATE SECTOR, CORPORATE AMERICA, STOPS SENDING GOOD-PAYING JOBS OVER SEAS THIS PROBLEM WILL NEVER GO AWAY. THE MIDDLE CLASS WAGE EARNER WHO SUPPORTED THE ECONOMY HAS BEEN ELIMINATED. AN "INFORMATION" BASED ECONOMY WILL NEVER REPLACE HARD-GOODS MANUFACTURING. FOREIGN ECONOMIES (CHINA) ARE GROWING BY LEAPS AND BOUNDS BECAUSE THEY HAVE FACTORIES THAT ARE PRODUCING HARD GOODS THAT THEY SELL TO STUPID AMERICANS.

September 16 2010 at 6:53 PM Report abuse +8 rate up rate down Reply
1 reply to LFunchesTSC's comment
PJD120

Amen, LFunchesTSC, you are absoultley correct. Until the jobs stop going to other countries, this will never end. People with no jobs can't buy anything. Something has to happen and happen very soon before we all be sitting on the curb somewhere.

September 17 2010 at 2:23 AM Report abuse rate up rate down Reply
rbeespga

BANK OF AMERICA or is it "BOTTOM FEEDERS OF AMERICA"

September 16 2010 at 6:18 PM Report abuse +2 rate up rate down Reply
1 reply to rbeespga's comment
Wayne

rbeespga ... Banksters of America with the Government playing the part of Vinie and Gueedo playing their Strong Arm.

September 16 2010 at 6:24 PM Report abuse +1 rate up rate down Reply
rbeespga

My house is in foreclosure as we speak.The supposed modification process is a scam. Talked to a woman from BOA for 2 hours in Oct. and she said that I qualify for modification,and we went through the paperwork for 2 hours.Supposed to make 3 trial payments and then get the final note.YEA

September 16 2010 at 6:06 PM Report abuse +2 rate up rate down Reply
1 reply to rbeespga's comment
Wayne

I guarantee that modification is a scam for you to get into a contract with them. Have you asked them to produce the Note???

September 16 2010 at 6:40 PM Report abuse +1 rate up rate down Reply