Home Seizures Rise as Banks Adjust to Foreclosure Flow
Home seizures in the U.S. rose 5.4 percent last month, the first annual gain in two years, as lenders seek to manage the flow of distressed properties without disrupting the housing recovery, according to RealtyTrac.
Banks repossessed 59,134 homes, up from 56,124 from November 2011, the Irvine, California-based data firm said today in a report. The increase was the first since October 2010, when foreclosures slowed after allegations that lenders were using faulty practices to take property from delinquent homeowners. Seizures climbed 11 percent from the previous month.
“Lenders have figured out how to play the foreclosure game in this new world where they’re getting a lot more scrutiny,” Daren Blomquist, RealtyTrac vice president, said in a telephone interview. “Everybody involved in the foreclosure industry has finally got a good handle on how to manage these properties to create a more managed and stable flow.”
The five largest lenders in February agreed to a $25 billion settlement of the charges and have since been pursuing foreclosure alternatives such as short sales, where a property is sold for less than the amount owed. Repossessions since March have slowed to fewer than 60,000 a month, an “acceptable” level for servicers that previously had struggled to process a flood of distressed homes, Blomquist said.
In the peak year of 2010, banks took back an average of 87,542 homes a month on the way to a record 1.05 million completed foreclosures, according to RealtyTrac.