Foreclosing on a home is a process – and lenders are finally working their way through it – pulling the foreclosure crisis full circle. What do we mean?
Stopping Foreclosure: Banks Slow to “Pull the Trigger”
In February, we wrote about how banks were purposely not foreclosing on homes. This was because so many of them were deluged so quickly with homeowners who were defaulting that that they couldn’t keep up. Extra staff had to be hired and trained to even begin to start processing default notices. Now though, it seems they’re working through the backlog.
Lenders Now Starting to Take Action on Foreclosed Properties
Even though they’re still not handing out as many default notices as they could, lenders have gotten busy if the following is any indication:
Banks repossessed the second highest monthly number of homes ever last month, working through distressed loans already on their books rather than sharply stepping up new default notices, real estate data company RealtyTrac said on Thursday. [Source: ABC News article via Reuters, Bank Repossessions Drive up July Foreclosures]
Prevent Foreclosure: What Current Foreclosure News Means for “The Average Joe”
There’s still time to save your home, but it’s slowly running out. To explain, in the post back in February we theorized that “once the market starts to recover, lenders will be much less likely to work with struggling homeowners.” So get your financial act together as soon as you can. If you can’t save your home — deal with that reality and make contingency plans, eg, strategic default, a short sale, a deed in lieu of foreclosure, etc.
The fact that banks are starting to process the backlog of foreclosed properties on their books is a sign that they’ve weathered the initial shock – and have now put support staff in place to begin digging out.
But according to the ABC News piece there are currently “5 million seriously delinquent loans, many of which would normally already be in foreclosure.”
Good News for Lenders May be Bad News for Homeowners Trying to Stop Foreclosure
Lenders getting their act together doesn’t bode well for those who want to prevent foreclosure. The reason is, what these homeowners need – more than a job, which is one of the mitigating factors of this prolonged crisis – is time.
They need time to find another job; time to seek a workable home loan modification or refinance, time to start paying some of the arrears due on their late mortgage . . . time, time, time. And, this is exactly what they’re running out of.
And, while there’s good news on the home foreclosure front, it may be exactly what those trying to stop foreclosure don’t want to hear.
Good Home Foreclosure News
Foreclosure Activity dropped by double digits from a year ago (10 percent);
Default Notices drop by almost 30% from a year ago (remember, though the 5 million seriously delinquent loans which in any other type of market would have already been in foreclosure); and
Home foreclosure auctions down from by approximately 17% from first quarter of this year (March).
P.S.: Finally, an easier way to get foreclosure cleanup work is here. The Property Preservation & Real Estate Industry Contracting & Subcontracting Directory includes over 1,500 industry contacts to help you get more work – quicker and easier.
P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.
Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.