Banks Seize More Properties Than Ever

According to studies released by RealtyTrac, Inc. banks have seized nearly three times as many homes in July '08 than just a year earlier.

By: John Noble

According to studies released by RealtyTrac, Inc. banks have seized nearly three times as many homes in July '08 than just a year earlier. The number of properties delinquent in their payment rose by 55 percent. During this time, seizures by lenders rose nearly 185 percent, increasing to 77,295. This is the largest increase since data began being reported, in 1st quarter, 2005. All in all, nearly 275,000 properties received a default notice in the year in question.

Rick Sharga, executive vice president for marketing at RealtyTrac, said that, “The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen.” Through July of this year, over 775,000 properties were owned by banks, or Real-Estate-Owned properties.

With growing numbers of foreclosures greatly weakening home prices, it's becoming harder for homeowners to borrow against their homes. Many now owe more than the home is worth. In May, US home prices fell nearly 16 percent, according to the Case-Shiller price index. Real-Estate-Owned properties are the fastest growing sector of foreclosure activity.

Nevada had the highest foreclosure rate, followed by California and Florida. Experts estimate that nearly half of all sub-prime borrowers could lose their homes, amounting to 8.4 percent of total home ownership. Of course, amid all the bad news is a ray of hope. Some cities, such as Stockton, California, may have reached their saturation point, meaning that their foreclosure rates are actually falling, a sign of better times ahead.