August Foreclosures Hit Record Highs

by: Tim Iacono

Well, maybe it’s a good thing that the short-sale offer we made back in May didn’t pan out as we had hoped because, according to this report by Diana Olick over at CNBC, the banks added a record number of homes to their REO list last month and, as I understand it, these deals are much easier to get done than short-sales.

The nation’s banks repossessed a record number of homes in August, according to industry sources. RealtyTrac, an online foreclosure sale site, will release its monthly numbers on Thursday, but sources there confirm the number of repossessions will come in just shy of 100,000 for the month.

That is the highest since the site began tracking in 2005. July’s repossession number was the second highest on record. The last highest was 93,777 in May of 2010.

Notices of Default, which are the first step in the foreclosure process, are up slightly but mostly thanks to a jump in California, where the numbers had been artificially low of late, as banks tried to modify borrowers.

“With respect to the NOD increase, I think it is the modification redefault wave beginning to build and new modifications slowing to a trickle, indicating banks have lost their primary borrower re-leveraging tool,” says mortgage industry consultant Mark Hanson.

Yeah, it’s about time the loan modification redefault wave hit – in the end they’ll look back at that effort as one that only helped the banks to “extend and pretend” another nine months. And to think that the bank involved with our short-sale offer actually raised the price they thought they could get from us over about the last five or six weeks. Amazing…