Lenders took back more homes in August than any month since the start of the US mortgage crisis. The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, RealtyTrac said today. In all, banks repossessed 95,364 properties last month, up 3% from July and an increase of 25% from August 2009.
Banks have been stepping up repossessions to clear out their backlog of bad loans, but they can't afford to simply dump the properties on the market for fear of overwhelming a soft market—fewer than a third of repos are currently for sale 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 estimates more than 1 million are likely to lose their homes this year. Check out Newser's recession depression grid here.
(Read more foreclosures stories.)