U.S. Foreclosures Fall, Bank Repossessions (REOs) Hit Record High

The national foreclosure rate continued to fall in May from the previous month, according to a new report released Thursday.

The national foreclosure rate fell by 3.27% in May from the previous month.

However, bank repossessions reached a record high during the same month, a sign that lenders are focusing on their backlog of foreclosure inventory before tackling new distressed loans, according to foreclosure database website RealtyTrac, which released the report.

“What it looks like is that the lenders are focusing on processing the delinquent loans they already have rather than initiating new foreclosures,” said Rick Sharga, senior vice president of RealtyTrac.

Foreclosure activity dropped 3.27% in May from the previous month, and was up +0.45% from May 2009. In all, 322,920 properties generated a foreclosure notice.

1 in every 400 homes in America received a foreclosure notice in May. Bank repossessions (known as real estate owned properties or REOs) hit a record high in May for the second month in a row.

All 50 states reported a year-over-year increases in REOs, according to RealtyTrac. It is projected that over 3 million homes will receive a foreclosure notice over the course of this year, said Sharga.