Banks repossess $304 billion in soured mortgages in 2010: Equifax
Banks repossessed $304 billion of foreclosed mortgages in 2010, more the double the combined amount in 2006 and 2007, according to research from credit rating agency Equifax (EFX). The number is still climbing and shows no signs of peaking, researchers said. As of May, roughly $319.7 billion of mortgages written in 2006 and 2007 reached the initial stage of the foreclosure process. Much of that, Equifax said, will be written off as a loss. On the back-end of the foreclosure process, banks continue to struggle with the weight of REO, or repossessed properties. Roughly 3% of all mortgages in the country, representing $21.8 billion of principal are in REO, according to Equifax. Roughly two-thirds of the past-due balances on delinquent mortgages were written between 2005 and 2007, the company said. Craig Crabtree, senior vice president and general manager for Equifax mortgage services, said the shadow inventory of foreclosures plays a dominant role in slowing the pace of economic recovery. Data provider CoreLogic (CLGX) recently showed a 10% yearly decline in the shadow inventory to 1.7 million homes in April. But the supply fluctuates among different markets. In areas hardest hit by the financial crisis, such as New York and Florida, the inventory of distressed properties could take as long as 10 years to work through. "Until these foreclosures are processed, the mortgage market will continue to impact economic growth," Crabtree said. Write to Jon Prior. Follow him on Twitter @JonAPrior.