Bank repossessions (that’s when not even the bank can sell your house) are up 48% from a year ago, as falling house prices trapped borrowers in mortgages they couldn’t afford, says Bloomberg.

One in every 483 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said. That was the highest rate since the Irvine, California-based company began reporting in January 2005 and the 29th consecutive month of year-over-year increases. Nevada, California and Arizona posted the highest rates in the U.S. and New Jersey entered the top 10.

“It’s definitely a different kind of market than what we got used to a couple years ago,” said Devin Reiss, owner of Realty 500 Reiss Corp. in Las Vegas. “We used to sell homes in a day. Now 50 percent of our sales are foreclosures.”

The vicious cycle of foreclosures depressing home prices and falling home prices leading to more foreclosures continues…

Right now, lenders are afraid to lend and buyers are afraid they’ll be under water in a year, so unless something dramatic happens we’re going to continue to see the trend go in the wrong direction,” said Rick Sharga, RealtyTrac’s vice president of marketing.

Foreclosures Rise 48% in May as Repossessions Double (Update2) [Bloomberg]
(Photo: amyadoyzie )

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