The number of homes taken over by banks reached 102,134 last month – the first time home repossessions have topped 100,000 in a single month, says real estate data company RealtyTrac.
Overall, there were 347,420 foreclosure filings in September, three percent higher than August.
But experts don’t expect the trend to continue, at least not anytime soon, thanks to the launch of a nationwide investigation of the mortgage industry. Recent news reports cite a winding, seemingly-unending paper trail of mortgage documents and agreements spawned during the height of the housing bubble, in which investment banks were handing out mortgages in a frenzy. The end result of the housing storm is a deluge of missing paperwork, improperly signed documents, documents that haven’t been signed at all, etc. Many mortgage lenders have since gone out of business or have been bought-out by bigger institutions. Thus, investigators have found that many banks are attempting to foreclose on homes that they may not even own.
Several major lenders have in recent days halted foreclosure sales until they can get a better handle on the situation. And, attorneys general from all 50 states have joined in a joint investigation.
While the implications of the recent stoppage in home repos remain unclear and questions continue to go unanswered, experts warn the freeze does very little to help the economic state of the country. The U.S. Department of Labor reports that initial claims for unemployment insurance benefits rose by 13,000 to 462,000 last week – affirming employers’ reluctance to hire in a slow economy, and proving that when the smoke clears, the U.S. will still be left with thousands of bank-owned mortgages and millions of Americans who are unable to afford them.