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US foreclosure activity rose in August from the previous month, and banks and lenders took ownership from homeowners at a record pace, according to a new report released Thursday.
|Fuse | Getty ImagesForeclosure fillings rose 4.18 percent in August from July.|
Bank repossessions, often the final step in the foreclosure process after a home fails to sell at auction, increased about 3 percent from the month before to 95,364, a record high. At the same time the number of properties that received default notices-the first step in the foreclosure process-decreased 1 percent from a month ago and fell 30 percent from a year ago, a sign that lenders are focusing on their backlog of foreclosure inventory before tackling new distressed loans, according to foreclosure listing website RealtyTrac, which released the report.
Overall, foreclosure fillings rose 4.18 percent in August from the previous month, and were down 5.48 percent from a year ago. In all, 338,836 properties were in the foreclosure process. One in 381 U.S. households received a foreclosure notice in August. (Foreclosure notices are defined as a default notice, auction sale notice or bank repossession.)
“There is a buildup in delinquent loans that are not in foreclosure,” said Rick Sharga, senior vice president of RealtyTrac, adding that banks and lenders are slowing the process to avoid a drop in home prices. “It’s a managed slowdown more than anything else,” he said.
“The underlining conditions haven’t improved,” Sharga added, referring to high unemployment and falling home prices in certain markets.
The ten states with the highest foreclosure rates were little changed from the previous month, according to the RealtyTrac report. For the 44th straight month, Nevada had the highest foreclosure rate in the country with one in every 84 properties in the state getting a foreclosure notice. (Nevada also has the highest unemployment in the country.)
Florida ranked second with one in every 155 households receiving a notice, followed by Arizona (one in 165 households), California (one in 194 households) and Idaho (one in every 220 households.) (See the full list in our slideshow.)
Vermont had the lowest rate, with one in every 18,389 properties receiving a foreclosure notice.
The RealtyTrac report comes a day after the Mortgage Bankers Association reported that demand for home loans fell even though mortgage rates were at record lows. Also on Wednesday, real estate website Trulia.com reported that homeowners nationally slashed more than $29 billion from their asking prices in August, as they tried to lure buyers stalled by unemployment.
Published: Thursday, 16 Sep 2010 | 2:11 AM ET
By: Joseph Pisani
CNBC News Associate
The government is effectively bankrupt. Using GAAP accounting principles, the annual deficit is running in the range of $4 trillion to $5 trillion. That’s beyond containment. The government can’t cover it with taxes. They’d still be in deficit if they took 100% of personal income and corporate profits. They’d also still be in deficit if they cut every penny of government spending except for Social Security and Medicare. Washington lacks the will to slash its social programs severely, to change its approach to ever bigger government. The only option left going forward is for the government eventually to print the money for the obligations it cannot otherwise cover, which sets up a hyperinflation.