Mortgage Defaults are Dropping, Repossessions are Rising

Banks repossessed more homes last month than they have since the beginning of the housing crisis, even as the number of homes going into default continued to drop for the 7th month in a row, according to foreclosure listing firm RealtyTrac Inc. Banks have increased foreclosures to clear out their inventories of bad loans, but despite repossessing 95,364 homes last month, they still have thousands to go.  Analysts predict that this shadow inventory will prevent home prices from bottoming out, despite a 28 percent decline in prices from 2006. “Whether it’s the sidelined, shadow, or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, Morgan Stanley housing strategist. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”
Source: Realtor Mag