Mortgage modification measures may account for the latest drop in US foreclosure rates, but repossessions are accelerating and REO inventories are mounting. While the pipeline of new foreclosures is slowing, banks anxious to unload distressed properties will create home-buying and investment opportunities in the states hardest hit by the housing crisis. See the following article from HousingWire for more on this.
Foreclosures fell 5% during the first half of the year and the number of homes entering the process has slowed, according to a North Miami Beach, Fla.-based firm.
Foreclosure Listings Nationwide said second-quarter foreclosures rose 1% from the year ago and declined 4% from the prior quarter.
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More than 1.6m properties began the foreclosure process during the six months ending June 30, representing a nearly 7% decline from a year ago. The results are indicative of a slowing trend, but may be somewhat skewed from the full number of distressed borrowers, as banks continue efforts to modify mortgages, the company, which also provides foreclosure-investment information, said.
“We’re seeing a decline in foreclosure rates not because the market is repairing itself, but because banks are providing homeowners more time to pay off their debts before a foreclosure occurs in order to slow the trend,” said Jason Gallagher, an analyst at Foreclosures Listings Nationwide. “This basically means we’re not seeing as many new foreclosure properties. But we are seeing many existing foreclosure properties moving out of the foreclosure limbo stage into repossession by banks.”
REO inventory rose 5% during the second quarter and is up 38% since the second quarter of 2009, according to data the firm analyzed.
“There are a huge backlog of REO and bank owned homes right now, and banks are going to be eager to get them off their hands fast,” Gallagher said. “That means low prices for buyers and investors, especially in places like Nevada, California and Florida.”
Nevada has more homeowners going into foreclosure than any other state, with 1 in every 17 homes beginning some stage of the process during the first six months of the year, but that figure is down 6% from a year earlier.
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