Banks putting foreclosed homes into inventory; other sales flat

Clark County foreclosure sales jumped dramatically in September as 2,771 homes went back to the bank, a 52 percent increase from the previous month and 32 percent increase from the same month a year ago, ForeclosureRadar reported Tuesday.

The number of foreclosure sales purchased by third parties was 564, compared with 566 in August and 513 in September 2009, the online foreclosure tracking service showed.

Foreclosures filings were a mixed bag with notice of default filings down 9.2 percent and notice of trustee sale filings up 3.6 percent in September. Inventory of real estate-owned, or bank-owned, homes in Clark County rose 8.1 percent during the month to 14,924.

September foreclosures rose in all of the states covered by ForeclosureRadar.com, but Nevada was significantly higher than the rest, said Sean O’Toole, chief executive officer of the Discovery Bay, Calif.-based website.

“There’s not anything specific at this point,” O’Toole said. “I’d say each lender is on their own schedule. I don’t think it’s a change in direction for servicers. One thing I will say is foreclosures tend to slow down during the holidays, so before and after that tends to be a little bit of a wave.”

Five major lenders recently announced that they would suspend foreclosure activities in certain states because of legal questions over notarization of documents.

ForeclosureRadar has yet to detect any change in foreclosure sales in Nevada by these lenders through the first week of October. That’s not completely unexpected, O’Toole said, as the majority of activity was limited to 23 states where a judge’s action is need to approve foreclosure. Nevada, Arizona, California, Oregon and Washington are not among those states.

Sen. Harry Reid, D-Nev., last week urged lenders to place a moratorium on foreclosures in Nevada until they make sure homeowners aren’t “improperly directed into foreclosure proceedings.”

One of the lenders, Bank of America, said it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents.

“We regularly see lenders make minor mistakes in foreclosure filings,” O’Toole said. “But the reality is that far more homeowners are behind on their mortgage payments than are even in foreclosure. The clear problem in the housing market today is not foreclosures, but negative equity. As long as the focus remains on the symptom rather than the disease, we will see little progress towards real solutions and this crisis will drag on for years to come.”

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.