RealtyTrac Confirms Greatest 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, based on on-line foreclosure sale web page RealtyTrac, new REO properties reached a record-setting high of 95,364 properties, the highest monthly total inside the history of the website. That number represents an boost of 3% from July along with a 25% jump from August 2009. The second-highest number was 93,777 back in May well of this year. 3 separate monthly records have, the truth is, been set within the last 5 months.
J.P. Morgan Chase cited the "shadow inventory" of foreclosed properties as a reason for the continued high REO household numbers - and as 1 of their main factors that they think a housing recovery could not come until possibly 2014. There already exists more than a year's supply of existing houses for sale, as well as the number of foreclosures will put much more pressure on genuine estate costs.
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.
1 reason for that? At the very least 1 in 5 homeowners owes additional on their mortgage than their house is worth - and much more and much more of those homeowners believe it is perfectly acceptable to walk away from that mortgage, in accordance with a Pew Analysis Center survey. That trend will continue to improve as property costs continue to reduce.
Whilst subprime loans constitute the bulk of the mortgage defaults, signs now point to growing defaults on prime loans, which dominate the bulk of the market place. Prime loans survived the housing bubble with out considerably effort mainly because they weren't as susceptible to cost fluctuations - but the poor economy and continued unemployment are now hitting these homeowners at the same time.
You will find much less than three.five million subprime mortgages - and about 40 million prime loans within the marketplace, 6.2% of which had been 60 days delinquent in June 2010 and 3% of which had been 90 days delinquent. Specialists think these delinquencies, if they continue trending as they're now, could finish up affecting more than six million houses.
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.
