Banks apparently have renewed their focus on real estate foreclosures, if numbers from August are any indication.
Lender Processing Services Inc. reported this week that real estate foreclosure starts for the month were up 19.7 percent from July, with first-time starts at their highest level of 2011.
The 247,957 starts in August are still 12.2 percent less than last year’s. There are an estimated 2.15 million properties in the foreclosure process – down from 2.2 million in January, but still near record highs.
Many lenders suspended their foreclosures late last year and into the spring because of the robo-signing scandal. But with the huge inventory of delinquent loans, they are feeling the pressure to process them through the system.
What will be a steady stream of foreclosures is good news for real estate investors, looking for either house-flipping or buy-and-hold properties.
Currently, approximately 11 million homeowners have mortgages that are are under water (in which they owe more on their mortgage than their home is worth). Another 2.4 million have near-negative equity, between 0 percent and 5 percent. The two groups are 27.5 percent of all residential homeowners with mortgages.
Here is a chart of properties in foreclosure in the United States, from January 2008 to August 2011. (The data is from Lender Processing Services Inc.):
