| By :
Frank Patrick
RealtyTrac Confirms Biggest Month for Bank REOs Ever Just as predicted by many experts, bank foreclosures, instead of finally declining, are instead hitting new heights as we head into the final quarter of the year. In August, according to online foreclosure sale site RealtyTrac, new REO properties reached a record-setting high of 95,364 properties, the highest monthly total in the history of the site. That number represents an increase of 3% from July and a 25% jump from August 2009. The second-highest number was 93,777 back in May of this year. Three separate monthly records have, in fact, been set in the last five months. J.P. Morgan Chase cited the "shadow inventory" of foreclosed properties as a reason for the continued high REO home numbers - and as one of their primary reasons that they believe a housing recovery may not come until possibly 2014. There already exists over a year's supply of existing homes for sale, and the number of foreclosures will put even more pressure on real estate prices. John Burns Real Estate Consulting estimates there are approximately two and a half million homes in the foreclosure process (homes more than 90 days behind on their mortgage payments) at the moment. In addition, almost five million homeowners are at least 30 days late on a mortgage payment. The firm believes that the inventory of REO homes will continue to trend upward from its current official number of 562,000. One reason for that? At least one in five homeowners owes more on their mortgage than their home is worth - and more and more of those homeowners think it's perfectly acceptable to walk away from that mortgage, according to a Pew Research Center survey. That trend will continue to increase as home prices continue to decrease. While subprime loans constitute the bulk of the mortgage defaults, signs now point to increasing defaults on prime loans, which dominate the bulk of the market. Prime loans survived the housing bubble without much effort because they weren't as susceptible to price fluctuations - but the bad economy and continued unemployment are now hitting these homeowners as well. There are less than 3.5 million subprime mortgages - and about 40 million prime loans in the marketplace, 6.2% of which were 60 days delinquent in June 2010 and 3% of which were 90 days delinquent. Experts believe these delinquencies, if they continue trending as they are now, could end up affecting over six million homes. All these facts clearly add up to an ever-increasing REO property inventory for all the major banks and lending institutions in the foreseeable future, meaning the demand for REO agents and brokers will still be growing in the next few years.
|
![[Valid RSS feed]](http://www.articlesbacklink.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
