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.
Thursday, August 12, 2010
Tuesday, August 10, 2010
Market Roundup
Home sellers are seeing their properties languish on the market for years, in some cases. It is beginning to seem normal to see properties that have been listed for more than 360 days
As we are rounding this year, the news isn’t going to look a lot better for home sellers.
Unemployment is extremely high and companies are still laying off workers in many areas. Where unemployment is high, foreclosures are spiking.
Speaking of foreclosures, the number of homes receiving a foreclosure notice hit an all-time high in 2010, but the number is expected to rise further next year (perhaps as high as 4 million).
While the number of homes on the market has shrunk a bit, there is a shadow inventory of as many as 2.5 million homes that hasn’t even been listed. This includes properties where homeowners are delinquent on their mortgage and bank-owned properties (also known as REO properties).
The only pieces of good news: mortgage interest rates hit a 50-year low recently falling all the way to 4.71 for a 30-year fixed-rate mortgage and 4.25 percent for a 15-year loan, and the federal government offered the $8,000 first-time home buyer tax credit and in November introduced the $6,500 trade-up tax credit.
Unfortunately, home sellers are going to find tougher conditions all around next year, as the tax credits end, mortgage interest rates rise, and the number of foreclosures increases.
More economists and industry observers are saying that the housing industry will make an extremely slow recovery due to the lack of jobs and the tightening of credit.
As we are rounding this year, the news isn’t going to look a lot better for home sellers.
Unemployment is extremely high and companies are still laying off workers in many areas. Where unemployment is high, foreclosures are spiking.
Speaking of foreclosures, the number of homes receiving a foreclosure notice hit an all-time high in 2010, but the number is expected to rise further next year (perhaps as high as 4 million).
While the number of homes on the market has shrunk a bit, there is a shadow inventory of as many as 2.5 million homes that hasn’t even been listed. This includes properties where homeowners are delinquent on their mortgage and bank-owned properties (also known as REO properties).
The only pieces of good news: mortgage interest rates hit a 50-year low recently falling all the way to 4.71 for a 30-year fixed-rate mortgage and 4.25 percent for a 15-year loan, and the federal government offered the $8,000 first-time home buyer tax credit and in November introduced the $6,500 trade-up tax credit.
Unfortunately, home sellers are going to find tougher conditions all around next year, as the tax credits end, mortgage interest rates rise, and the number of foreclosures increases.
More economists and industry observers are saying that the housing industry will make an extremely slow recovery due to the lack of jobs and the tightening of credit.
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