The number of U.S. homes seized by banks reached 95,364 in August, the highest monthly figure on record since analysts began tracking the number in 2005. That's a 25 percent increase from the August 2009 figure. In recent weeks, the housing market has declined so precipitously that some experts have suggested the end of housing as an investment. Here's what journalists and experts have to say about the latest record-breaking bad news.
- How Foreclosures Make Everything Worse Bloomberg's Dan Levy writes, "Foreclosures are contributing to a growing housing supply that may add as many as 12 million homes to the U.S. market. Demand is crumbling amid high unemployment and following the expiration of a federal homebuyer tax credit in April. Sales of new and existing homes fell in July to the lowest level on record. Home prices have fallen 28 percent since 2006, according to the S&P/Case-Shiller index of values in 20 U.S. cities."
- Bad Loans, Unemployment Exacerbate Problem The Associated Press reports, "Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can't afford to simply dump the properties on the market. Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April."
- Fewer People Can Pay Mortgage Brokers The Street's Lauren Tara LaCapra explains, "Mortgage servicers have begun to grapple with troubled borrowers who can't find solutions through the government or the private industry." That has left mortgage bankers with fewer options other than repossession.
- Silver Lining: Default Notices Decreasing 24/7 Wall Street's Douglas McIntyre writes, "A total of 96,469 U.S. properties received default notices in August, a 1% decrease from the previous month and a 30% decrease from August 2009 — the seventh straight month where default notices have decreased on a year-over-year basis. Default notices peaked in April 2009, when 142,064 were reported nationwide, RealtyTrac reported. The news, in other words, has a silver lining. Year-over-previous-year numbers have begun to show a substantial improvement."
- New Phase for Housing Market CNNMoney's Les Christie writes, "The foreclosure crisis has entered a new phase: The number of properties entering the foreclosure process has dropped, and now nearly matches the number of repossessions. The number of homeowners falling enough behind on their loans to attract initial notices of default was down 30% in August, RealtyTrac said Thursday. Eventually, that should translate into fewer people losing their homes." So why foreclose more homes? "Borrowers might vacate their homes when they receive default notices, leaving the houses empty, subject to vandalism, and forcing lenders to take over the expense of maintaining them."