For the third quarter of 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 930,437 properties in the third quarter, a nearly 4 percent increase from the previous quarter but a 1 percent decrease from the third quarter of 2009. One in every 139 U.S. housing units received a foreclosure filing during the quarter.
Foreclosure filings were reported on 347,420 U.S. properties in September, an increase of nearly 3 percent from the previous month and an increase of 1 percent from September 2009. A record total of 102,134 bank repossessions were reported in September, the first time bank repossessions have surpassed the 100,000 mark in a single month.
“Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac. “We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks.”
The real question is how long it will take to sort out all of these improperly prepared foreclosure documents. This could delay foreclosure sales for months and lead to chaos in the non-conforming MBS market. One thing that surprises me is the phony uproar by politicians regarding these foreclosure issues. In 99.8% of all cases there is no doubt that the homeowner had a mortgage and was in default. Yes, the banks incorrectly prepared the foreclosure documents, but this will not stop the banks from eventually repossessing the home. The only uncertainty is if this fiasco will delay the process by a few weeks or months. The point being that it does not matter if the banks made mistakes, the mortgage was in default and the homeowner will lose the home. I think politicians are using this issue to increase their chances of re-election in November. They want to appear concerned about homeowners and position themselves against the banks despite the fact almost all congressman voted for TARP.
Black Swan Insights