Nearly 1 million homes nationwide are in the process of foreclosure, according to a report Wednesday from the U.S. Department of the Treasury covering banks and loan servicers that make up 64 percent of all outstanding mortgages. As of June 30, there were 992,554 homes in the process of foreclosure, up 15.3 percent from March 31 and up 79.4 percent from the same period a year ago, the Office of the Comptroller of the Currency reported.
While the rock-bottom sales of foreclosed properties are dragging real estate prices down, what’s on the market now is the just tip of the iceberg. The report said that 106,007 foreclosures were completed as of June 30. For every bank-owned property, there were nine more homes in the process of foreclosure.
There were 23,102 short sales in the second quarter, up 34.8 percent from the first quarter.
The report found that 5.3 percent of all mortgages were more than 60 days past due as of June 30, up from 4.8 percent as of March 31. The worst categories for delinquency were subprime loans, at 17.8 percent, and payment option adjustable-rate mortgages, at 15.2 percent.
The report noted that banks modified 142,362 loans in the second quarter, down 25.2 percent from the first. However, the effectiveness of those modifications is questionable. More than half of the loans modified in the first nine months of 2008 were found to be delinquent as of June 30.
In addition, banks agreed to 297,212 new mortgage payment plans during the second quarter, up 73.9 percent from the first quarter. The increase came mostly from the federal “Making Home Affordable” trial plan.