Foreclosure Growth Slows in August

Irvine, CA, Sept. 16, 2010--The number of properties entering the foreclosure process slowed in August for the seventh month in a row, foreclosure tracking firm RealtyTrac Inc. said.

However, banks repossessed 95,364 properties in August, up 3% from July and 25% from August 2009.

The firm said lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

However, banks can't afford to dump the properties on the market and fewer than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac.

"These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer's market with too much distressed inventory for fear of what it would do for house prices," he said.

As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer.

RealtyTrac said that more than 2.3 million homes have been repossessed by lenders since the recession began in December 2007 and more than 1 million American households are likely to lose their homes to foreclosure this year.