Banks Add REO Inventory at Record Pace in August. More Homes Hit Auction Block
One in every 381 housing units or 338,836 U.S properties received a foreclosure filing in August according
to data released today by RealtyTrac.
This is a 4 percent increase over the 325,229 filings that were reported in July but a
decrease of 5 percent from August 2009.
One in every 381 housing units received a foreclosure filing during the
RealtyTrac, located in Irvine
California, compiles a U.S. Foreclosure Market Report each month from tracking
documents filed in all three stages of foreclosure:
- Notice of Default (NOD)
and Lis Pendens (LIS). This is the first legal notification from a lender
that the borrower on a mortgage loan has defaulted under the terms of
their mortgage and the lender intends to foreclose unless the loan is
- Auction - Notice of Trustee
Sale and Notice of Foreclosure Sale (NTS and NFS); If the
borrower does not catch up on their payments the lender will file a notice
of sale (the lender intends to sell the property). This notice is
published in local paper and contains information pertaining to the date,
time and subject property address.
- Real Estate Owned or REO
properties : "REO" stands for "real estate
owned" and typically refers to the inventory of real estate that
banks and mortgage companies have foreclosed on and subsequently purchased
through the foreclosure auction if there was no offer higher than the
Early stage filings continued
to decline but were offset by an increase in late phase filings in August.
were filed on 96,469 properties, a decrease of 1 percent from July and 30
percent from August, 2009. This is the seventh
straight month during which the current month's filings were lower than a year
earlier. However, default notices
increased in California, New York, Indiana, Ohio, and Florida.
Foreclosure auctions were scheduled for the
first time on 147,003 properties, up 9 percent from July and 2 percent
Actual foreclosures, that is
homes taken into banks' owned real estate inventories, were the highest in
RealtyTrac's reporting history. 95,364
properties were foreclosed, an increase of 3 percent from the July total of 92,858
and 25 percent higher than one year earlier.
The previous peak of 93,777 foreclosures occurred in May of this year.
James J. Saccacio, chief
executive officer of RealtyTrac said, "The trend lines of decreasing
default notices and increasing bank repossessions converged in August, with
virtually the same number of new default notices and bank repossessions for the
month - a clear indication that the clogged foreclosure pipeline is being
carefully managed on both ends by lenders and servicers. On the front end, seriously delinquent loans
are rolling into foreclosure at an unusually slow rate, while on the back end
the dammed-up inventory of properties already in foreclosure is moving to REO
in a steady stream rather than a flood - presumably to prevent further erosion
of home prices."
Nevada, Florida, and
Arizona continued to lead the nation in the rate of filings, with Nevada
ranking highest for the 44th consecutive month. One in every 84
housing units in the state received a foreclosure notice during the month, 4.5
times the national average. Despite the
high figures, the state is improving; foreclosure activity was down 25 percent
year-over-year for the 11th straight month.
In Florida, one in every
155 homes was the subject of a filing and in Arizona, one in every 165
units. Other states with high rates of
foreclosure were California (1:194) and Idaho (1:222). Filings in Idaho were up 9 percent from July
and 11 percent from a year earlier.
California alone accounted
for 20 percent of the total number of filings in the nation with 69,143
recorded, a 3 percent increase from July but a 25 percent decrease from August
2009. Florida had 56,877 filings, 17
percent of the nation's total, up 2 percent month-over-month but down 46
percent from August 2009.
All ten of the metropolitan areas
with the highest foreclosure rates posted year-over-year decreases for the
second month in a row. The top metro
area was Las Vegas-Paradise Nevada with one in every 73 units receiving a
filing followed by Modesto, California (1:95) and Stockton, California (1:100)
MND has discussed the timing of REO asset disposition and its effect on home prices...
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