This doesn’t appear to harmonize well with the economic recovery tune:
A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report. RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009. More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
“We’re right now on pace to see more than 1 million bank repossessions this year,” said Rick Sharga, a RealtyTrac senior vice president.
I imagine ONE MILLION repos will exert an amount of negative pressure on home prices in the near future. What most people don’t realize is the way in which being underwater tends to prevent a house from being put on the market. The recent rise in prices is the result of a temporary restriction in supply due to underwater homeowners being trapped in their worthless homes, not the rise in demand that would be a sign of recovery.
UPDATE: Forgive me if I’m skeptical that anything more than a handslap and a fine is meted out. “SEC charges Goldman Sachs with civil fraud in structuring and marketing of CDOs tied to subprime mortgages.”