Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Banks seizing more foreclosed homes

By Tami Luhby, staff writer


NEW YORK (CNNMoney.com) -- Banks are seizing more foreclosed homes even as the number of people falling behind on their mortgages is declining.

Bank repossessions hit a record monthly high in May, according to RealtyTrac, the online marketer of foreclosed properties. Lenders took back 93,777 properties, up 1% from the previous month's record and 44% from the same period a year earlier.

Foreclosure filings, meanwhile, fell by 3% from a month earlier and edged up less than 1% from May 2009. One in every 400 homes received a foreclosure notice last month.

"Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed," said James Saccacio, RealtyTrac's chief executive.

Overwhelmed by the mortgage meltdown, lenders have been relatively lax in repossessing homes as they try to cope with the flood of borrower defaults. As the housing market starts to stabilize, however, they are turning their attention to taking back homes.

It can take more than a year to complete a foreclosure, on average, Jack Schakett, credit loss mitigation strategies executive at Bank of America, told reporters last week. In states that require lenders to take delinquent borrowers to court before foreclosure, the process can drag on closer to two years.

Worst states

Nevada, Arizona and Florida once again top the state foreclosure rates in May, though the pace is moderating.

One in every 79 homes in Nevada received a foreclosure filing last month, down nearly 12% from April and 16% from a year ago. The state's foreclosure rate is five times the national average.

Arizona, meanwhile, saw its foreclosure activity increase by less than 1% in May from the prior month and drop 5% from May 2009. One in every 169 properties received a foreclosure notice in May.

In Florida, one in every 174 properties got a foreclosure filing in May, up 4.76% from a month ago but down nearly 14% from a year ago.

Nationwide, one in every 400 homes received a notice in May, down 3.27% from last month and up 0.45% from a year ago. To top of page

Index Last Change % Change
Dow 21,817.27 20.72 0.10%
Nasdaq 6,375.02 -7.17 -0.11%
S&P 500 2,471.14 -4.28 -0.17%
Treasuries 2.29 -0.02 -0.91%
Data as of 3:12pm ET
Company Price Change % Change
Advanced Micro Devic... 14.04 -0.08 -0.60%
Altria Group Inc 66.55 -7.41 -10.01%
Starbucks Corp 53.59 -5.91 -9.93%
Bank of America Corp... 24.11 0.00 0.02%
Chesapeake Energy Co... 5.04 -0.01 -0.30%
Data as of 2:57pm ET
Sponsors

Sections

The Congressional Budget Office narrows its projection for when Treasury will run short on money if Congress doesn't raise or suspend the country's debt ceiling. More

One cyberattack in Ukraine could be a blueprint for others. But how likely is it to happen? More

For all the cruelty-free, anti-sweatshop, organic attention you give your individual purchases day to day, your money may be paying for causes you don't want to support. More