REOs Up as Pre-Foreclosures Fall

October 9, 2008 No Comments »

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The number of people who actually lost their homes to foreclosure increased during September as pre-foreclosure filings slowed, according to an analysis by Foreclosures.com.

During the month, 107,500 borrowers lost their homes to foreclosure, a 6.6 percent rise from August and an 82.6 percent increase from the same period a year earlier.

Foreclosure activity increased 25.8 percent from the second quarter to the third quarter of this year, with foreclosures on pace to top one million by year-end.

During the third quarter, 300,773 REOs were filed, equating to 4.1 of every 1,000 households, with nearly a third (89,450) found in hard-hit California, where bank-owned sales happen to be booming.

Meanwhile, pre-foreclosure activity (the beginning of the process) dropped 2.4 percent last month, driven by a 38.6 percent drop in California, 36.2 percent fall in Michigan, and 13.1 percent dip in Texas.

However, pre-foreclosure filings are still up 81.4 percent compared to the same time a year ago, with 561,467 notices filed in the third quarter alone.

The numbers seem to be falling, which may be attributable to recent legislation aimed at slowing the growing foreclosure epidemic.

In Massachusetts, recent law requires lenders to wait 90 days before initiating foreclosure proceedings, while New Jersey has just proposed a new bill that would require lenders to pay $2,000 for every home they foreclose upon.

Opponents of such measures claim they put more stress on already pressured mortgage lenders and simply delay the inevitable, but only time will tell.

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