Despite all the programs to help troubled borrowers, the foreclosure numbers continue to rise and there’s trouble inside the numbers as well.
RealtyTrac, the online foreclosure sale site, put out its monthly report today, and it shows foreclosure filings on 272,171 properties in July. That’s up 55% from a year ago. This big number includes default notices, auction sale notices and bank repossessions. The default notices don’t necessarily mean the home is going into foreclosure. The bank repossession is, of course, the final stage when the owner loses the home for good.
So when you break down the total numbers, RealtyTrac finds default notices up 53% (year-over-year), auction sale notices up 11% and bank repossessions up a whopping 184%.
“The sharp rise in REOs, [that’s the bank repossessions] combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale,” says James J. Saccacio, CEO of RealtyTrac. In fact, the site has more than three quarters of a million properties in its active REO database now. That’s 17 percent of all existing homes for sale, according to the National Association of Realtors.
What that says to me is that the downward pressure on home prices isn’t going to ebb anytime soon. Foreclosure sales are usually well below the median sale price in a neighborhood. I blogged earlierthis week about how some of the programs to help borrowers just aren’t coming in with the numbers they promise. Now we have the proof.