BT : US home foreclosures jump 44% to hit another record

Business Times - 11 Jun 2010

US home foreclosures jump 44% to hit another record

(NEW YORK) US home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac Inc.

Bank repossessions climbed 44 per cent from May 2009 to 93,777, the Irvine, California-based data company said yesterday in a statement. Foreclosure filings, including default and auction notices, rose about one per cent to 322,920. One out of every 400 US households received a filing.

'We're nowhere near out of the woods,' Rick Sharga, RealtyTrac's senior vice president for marketing, said in a telephone interview. 'We're likely to set a quarterly record for home seizures if June is anything like May.'

Lenders are completing the 'inevitable progression' of taking properties from homeowners who stopped paying, Mr Sharga said. He predicted last month that another 5 million delinquent mortgages will end in foreclosure in addition to properties that had already been repossessed. 'The second quarter won't be the peak,' Mr Sharga said. 'I'm not even sure 2010 will be.'

The previous record for seizures was 92,432 in April. Last month was the first in which every state had an increase in repossessions from a year earlier, according to RealtyTrac.

US private payrolls rose by 41,000 in May, Labor Department data showed last week. The hiring of temporary census workers boosted overall payroll growth to 431,000. The jobless rate fell to 9.7 per cent, from 9.9 per cent in April.

Almost a quarter of America's mortgage holders owed more than their homes were worth in the first quarter, Zillow.com said last month. Bank sales of foreclosed properties accounted for more than a fifth of all US home transactions in March, the Seattle-based real estate data provider said.

Wells Fargo & Co and Bank of America Corp, the two largest US home lenders, are cutting principal on some mortgages in an effort to keep owners in properties and get them to pay at least part of what they owe. -- Bloomberg

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