Home Foreclosures And Banks: Here's A Real Disturbing Number
I want to bring your attention to a disturbing little sub-number in today’s quarterly foreclosure report from California-based RealtyTrac. RealtyTrac reports “foreclosure activity,” which covers default notices, auctions sale notices and bank repossessions.
The numbers were pretty nasty nationwide, as expected, with activity up 23 percent quarter to quarter and 112 percent year over year.
When you break down the sub-categories, however, you find that the number of bank-owned properties is rising faster than ever before. “Typically you’ll see about 20 percent of the foreclosure filings being bank-owned,” RealtyTrac’s Rick Sharga told me in an interview this morning. “We’re getting to a point now where it’s well over 1/3 and aiming at 40 percent, so that just suggests that a lot of these homes can’t even be sold to investors at auctions – because there’s just no equity in the properties.”
Sharga estimates that by the end of this year there will be over a million bank-owned homes in the market. To put that in perspective, there are about four million properties listed on the Multiple Listing Service, or MLS, so a quarter of the inventory would be bank-owned. The National Association of Realtors noted last week that in a casual survey they found 18 percent of the homes currently on the MLS are foreclosed homes.
It’s interesting to me that given all the programs supposedly helping folks in default and all the banks claiming that they are doing refi’s or “work-outs” or whatever, a growing number of homes are still going back to the bank.
Questions? Comments? RealtyCheck@cnbc.com