New record property seizures in US as experts warn that foreclosure nightmare is not over yet

Bank repossessions climbed 44% from May 2009 to 93,777, while foreclosure filings, including default and auction notices, rose 1% to 322,920. One out of every 400 US households received a filing.
 
Senior vice president Rick Sharga warned that a quarterly record for home seizures is possible if June is anything like May.
 
Lenders are completing the inevitable progression of taking properties from homeowners who stopped paying, Sharga said. He predicted last month that another 5 million delinquent mortgages will end in foreclosure in addition to properties that had already been repossessed.
 
And it is nowhere near the peak. ‘The second quarter won’t be the peak. I’m not even sure 2010 will be,’ he said.
   
But he warns that the total amount of individual filings could reach as high as 4.5 million in 2010, up from 3.9 million filings in 2009.
   
He also points out that 80% of properties that enter the foreclosure process never reach Real Estate Owned status, and this is fortunate as a huge number of properties coming onto the market would see prices fall steeply.
 
Sharga explained that inventory is at an all time high with almost 900,000 REOs in RealtyTrac’s database. In the first three months of this year there were 250,000 new REO actions, a new record.
 
‘The only thing keeping this market from tanking is that these properties aren’t on the market. We went from seeing a steady stream of REO to a trickle and it could go back to a stream,’ he said.