Home repossessions surged in July, but pace of new home loan
defaults continued to slow

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. Written by: Alex
Veiga, AP Real Estate Writer
You need to be a member of Foreclosure Cleanup Network to add comments!
Join Foreclosure Cleanup Network