U.S. foreclosures up 55 percent in July 2008 - bank repossessions higher

Default notices, auction sale notices and bank repossessions increased 55 percent to 271.171 U.S. properties in July 2008 from same month a year earlier, according to RealtyTrac. The report also shows one in every 464 U.S. households received a foreclosure filing during the month.

From RealtyTrac:
Bank Repossessions (REOs) accounted for 28 percent of all activity during the month, while defaults accounted for 41 percent and auction notices accounted for 31 percent. That is in contrast to REOs accounting for just 16 percent of all activity in July 2007, while defaults in July 2007 were still at 41 percent and auction were at 43 percent. This shift in percentages shows that a higher proportion of properties that enter the forecosure process are ending up repossessed by lenders.
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The continued increase in bank repossessions does not bode well for a swift recovery in housing as the discount on repossessed homes continues to drive house prices lower. It is also stalling the recovery in financials by increasing the loss severity on foreclosures. Finance blogger naked capitalism looked into the relationship between loss severity and annual home price appreciation: "Now look at how high the losses are with merely 3% annual home price appreciation. Imagine what the losses look like with falling home prices."
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source: FORECLOSURE ACTIVITY INCREASES 8 PERCENT IN JULY
By RealtyTrac Staff http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=5041&accnt=64847
source: Quelle Surprise! Banks Taking Big Losses on Real Estate Disposals
Wednesday, August 13, 2008, naked capitalism http://www.nakedcapitalism.com/2008/08/quelle-surprise-banks-taking-big-losses.html

read also: U.S. foreclosure activity up53 percent in June 2008 vs a year ago
Thursday, July 10, 2008 http://manonthestreet64.blogspot.com/2008/07/us-foreclosure-activity-up53-percent-in.html