Mortgage servicers and banks foreclosed on more homes in August — 95,364 units — than in any month since the start of the U.S. mortgage crisis, according to new figures compiled by RealtyTrac, Irvine, Calif.
Compared to the same month a year ago, foreclosures spiked by 25%, marking the ninth consecutive month where REOs have increased on a year-over-year basis.
Mortgage bankers interviewed by National Mortgage News in recent weeks expect that the foreclosure picture will only turn uglier in the months ahead as Fannie Mae and Freddie Mac begin fining servicers that do foreclose in a more timely fashion.
RealtyTrac noted that Nevada continues to have the nation's highest foreclosure rate with one in 84 housing units receiving a foreclosure filing in August — 4.5 times the national average. For 44 straight months Nevada has had the nation's highest foreclosure rate.
Although the August numbers paint an ugly picture for foreclosures, the analytics firm found that foreclosures — which including default notices, scheduled auctions and bank repossessions — were filed on 338,836 properties, a 4% increase from July but a 5% decline from August 2009.
"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," said James Saccacio, chief executive officer of RealtyTrac.
"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," he said.