Despite recent good news about increasing home sales and moderating price drops, there is still no relief in sight when it comes to foreclosures. RealtyTrac will report Thursday that a record 360,149 homeowners received a foreclosure filing in July, up 7 percent from the previous month and up 32 percent from a year ago.
"Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions," said RealtyTrac chief executive James Saccacio in a statement.
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The figures come two weeks after the Obama administration took some of the nation's largest banks and mortgage loan servicers to task for not doing enough to help homeowners facing foreclosure, despite financial incentives and months of public outcry and complaint. The Treasury Department tried to publicly shame many banks and servicers by releasing statistics on how many homeowners under the administration's housing relief plan had been offered assistance. Overall, only 15 percent of those eligible for relief had received assistance, with an unequal distribution of banks offering assistance. Bank of America, for instance, had helped 4 percent of those eligible, while JP Morgan Chase had helped 20 percent.
The administration's plan unveiled earlier this year was intended to aid 3 million to 4 million borrowers. So far, only 235,000 had been helped, and the Treasury Department had set a goal of half a million homeowners receiving mortgage relief under the plan by Nov. 1.
"We can do better," said Assistant Treasury Secretary for Financial Institutions Michael Barr when the report was released. "We want banks to reach borrowers more quickly, and we are significantly increasing our efforts to reach borrowers as fast as humanly possible."
The rise in foreclosures came as the housing sector had been showing some signs of life in recent months. The most recent S&P/Case-Shiller Home Price index found that May was the fourth month in a row in which the overall annual home price decline actually improved. "The pace of descent in home price values appears to be slowing," said David Blitzer, chairman of the Index Committee at Standard & Poor's. In addition, both new and existing home sales increased in June.
But the record foreclosure filings, according to RealtyTrac, indicate that the housing market is still struggling. By way of comparison, in June more than 336,000 homes nationwide received a notice of foreclosure, while only 36,000 new homes and 523,000 existing homes were sold. As long as foreclosures continue to rise, the housing sector and prices in particular will continue to remain depressed, even as the overall economy appears headed for a recovery later this year.
As has been the case for more than 2½ years, Nevada had the highest rate of homes receiving foreclosure filings to total homes. RealtyTrac also reported that the top four states with foreclosure activity -- California, Florida, Arizona and Nevada -- accounted for more than half (57 percent) of the nation's foreclosure filings. (A foreclosure filing does not always mean a homeowner eventually loses the home to foreclosure.) Las Vegas reported the highest foreclosure rate for cities with populations above 200,000. Seven cities in California were also among the top 10 for foreclosure rates.