Foreclosures UP – Repossessions DOWN

Sign Of The Times - ForeclosureWell there’s good news and bad news.  Looks like the banks are back from their mandated vaction and going to town.  Initial filings of foreclosure notices are up for a third straight month.  BUT… banks are more than ever willing to let the homeowners do the dirty work of selling the house via a shortsale.

The number of homes that received an initial notice of default — first step in the foreclosure process — was 6% higher in July than last year, foreclosure listing firm RealtyTrac said Thursday. Filings of initial default notices have increased on an annual basis three months in a row.

The trend comes as banks work to make up for time lost last year as the mortgage-lending industry grappled with allegations that it had processed foreclosures without verifying documents.

The increase in homes entering the process raises the possibility that more properties could end up being foreclosed in coming months.

But of late, banks have been dialing back home repossessions and increasingly letting borrowers sell homes in a short sale. That’s when the bank agrees to accept less than the seller owes on the mortgage.

Banks took back 21% fewer homes last month than in July last year, RealtyTrac said. Repossessions were down 1% from June. They’ve been down on an annual basis every month going back nearly two years.

“Lenders are much less likely now than they were even a year ago or two years ago to repossess a property after they’ve started the foreclosure process,” says Daren Blomquist, a vice president at RealtyTrac….More at Lenders look for alternatives to repossessing homes – USA TODAY

If you’re in trouble with your mortgage, and foreclosure is looming, then it may be time to get to work with a realtor and get that house sold at a reasonable amount.  While a shortsale is still damaging to your credit the rebound is a lot faster than having a foreclosure on your credit report.

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About Anthony Candella

Anthony is the founder and Directing Attorney of YourCreditAttorney.com and has been helping consumers just like you understand and improve your credit and financial situation since 2003.