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Real estate data company RealtyTrac said on Thursday banks repossessed the second highest monthly number of homes ever in July, a day after the U.S. government said it would pump an additional $3 billion to help struggling home owners stay afloat.
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"What's driving most of the foreclosure activity is unemployment and other types of economic displacement," RealtyTrac senior vice president Rick Sharga told Reuters.
Banks took over 92,858 properties in July, up 9 percent in the month and 6 percent in the year. This was a shade below the peak of 93,777 homes in May, RealtyTrac data showed.
U.S. said on Wednesday it would tap further into the $700-billion Wall Street bailout fund to channel an additional $2 billion to the government's Hardest Hit Fund, assisting the 17 states that have unemployment rates higher than the national average, along with Washington, D.C.
The new lifeline will be supplemented by a fresh $1-billion program announced by the Department of Housing and Urban Development, or HUD, will help homeowners who are at risk of foreclosure due to involuntary unemployment, underemployment or a medical condition. The new program will give eligible home owners interest-free loans for as much as $50,000 for up to two years.
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The Treasury Department's Hardest Hit Fund, which was announced in February, initially extended $1.5 billion to five states. In March, $600 million was provided to five more states.
The government announced the Emergency Home Owner's Loan Program in July to complement Treasury's Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states.
The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment "bridge loan" (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.
California-based RealtyTrac has predicted that more than 3 million households are likely to get at least one foreclosure filing this year, which includes notice of default, scheduled auction and repossession.
Data showed banks took control of 269,962 properties in the second quarter, up 5 percent from the prior quarter and a 38 percent spike from the second quarter of last year, RealtyTrac said in its midyear 2010 foreclosure report.
One in every 78 households got at least one foreclosure filing in the first six months of this year.
According to RealtyTrac, five states had more than half of all foreclosure actions in July: California, Florida, Illinois, Michigan and Arizona. Nevada, Ohio, Georgia, Texas and Maryland were the other states with the 10 highest total foreclosure actions last month.
Nevada, Arizona and Florida and California had the highest state foreclosure rates. Nevada, hurt by overbuilding and speculation during the boom, had the highest foreclosure rate for the 43rd straight month. The other six states with the highest foreclosure rates were Idaho, Michigan, Utah, Illinois, Georgia and Maryland.
