Bank Foreclosure Listings Soaring Again Nationwide

by on Foreclosures

The number of properties in bank foreclosure listings nationwide has been soaring again, based on data from Barclays Capital.

In January this year, the estimated number of foreclosed homes in bank and investor listings has risen to 645,800, a jump of 4.6 percent from 617,286 in December 2009.

Barclays said that the number of foreclosure condos and homes peaked in November 2008 at about 845,000 units and then dropped gradually through 2009.

Through much of 2009, the number of real estate owned homes were lower than in 2008 despite continued foreclosure filings in 2009 because of the various moratoriums and foreclosure prevention schemes launched by states and cities, in addition to the federal mitigation programs.

Brisk demand for cheap fixer upper homes and other bank owned properties from first time buyers and investors also cut down bank inventories. The scheduled expiration of the federal tax credit last year spurred record purchases of foreclosures and nondistressed homes.

This year, the number of properties in bank listings is surging again because mortgage banks are now pursuing foreclosures on mortgages that did not qualify for the federal loan modification scheme and other foreclosure prevention options.

The slowdown in home sales also left more properties in the REO books of banks. Barclays analysts contended that the number of properties in bank foreclosure listings will surge in April to a peak level of around 733,000 units and then gradually decline again.

Foreclosure properties now comprise about 20 percent of all houses listed for sale nationwide.

The pace of foreclosures in the coming months will largely depend on where the economy goes and on how fast jobs are created to help boost income for mortgage payments and home purchases. It would also depend on the number of distressed homeowners that will be successfully rescued by additional efforts to prevent foreclosures.

Almost 15 percent of all mortgage holders or 8 million homeowners are delinquent on their loans or already in foreclosure. According to Barclays researchers, they estimate bank owned foreclosures using figures from mortgage securities investments.

Sales of bank REOs should increase, according to the analysts, because the level of new home construction is still low, but banks should not unload all their properties at a time foreclosure filings are still rising.

A strong economy is needed before properties from bank foreclosure listings can be released to the market without pushing home prices further down.

disclaimer