Foreclosure numbers rose in August
Jeremy Hobson: A report out this morning finds the number of first-time default notices for homeowners jumped by 33 percent between July and August.
But as Marketplace’s Jeff Tyler reports, that is not necessarily a bad thing.
Jeff Tyler: Default notices are sent when a loan payment is at least 90 days past due.
Rick Sharga: As odd as it sounds to say that a 33 percent increase in default notices is a good thing, it probably is on the balance.
That’s Rick Sharga with RealtyTrac, which issued today’s report. He says foreclosure rates earlier this year were artificially low, delayed by botched paperwork and legislation.
Sharga: If the housing market is going to recover, we need to work through the overhang of distressed properties. And the only way to do that is for the banks to be actively moving these properties through the foreclosure process.
Housing market consultant Thomas Lawler says there’s a big supply of foreclosed properties in the pipeline.
Thomas Lawler: About 2.3 million of those delinquent loans are ones where the borrower hasn’t made a payment in over a year.
Getting those bad loans off the books will likely mean a growing number of foreclosures in the months ahead.
I’m Jeff Tyler for Marketplace.
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