Thursday, October 14, 2010
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A total of 288,345 properties were lost to foreclosure in the July-September quarter, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service. That's up from nearly 270,000 in the second quarter, the previous high point in the firm's records dating back to 2005. But many of the foreclosures may be challenged in court later because of allegations that banks evicted people without reading the documents.
Banks have seized more than 816,000 homes through the first nine months of the year and had been on pace to seize 1.2 million by the end of 2010. But fewer are expected now that several major lenders have suspended foreclosures and sales of repossessed homes until they can sort out the foreclosure-documents mess.
On Wednesday, officials in 50 states and the District of Columbia launched a joint investigation into the matter.
Rick Sharga, a senior vice president at RealtyTrac, noted that legal challenges are likely. But he doubts many will be successful in overturning foreclosures. He said he expects foreclosures to resume and predicts about 1 million homes will be taken back this year.
"The bottom line is not that those properties won't be repossessed," Sharga said. "They simply won't be repossessed as quickly. We're simply delaying the inevitable."