U.S. Home Seizures Climb to Record as Banks Review Foreclosure Practices

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Oct. 14 (Bloomberg) -- More than 100,000 U.S. homes were seized by lenders in September, a record number that probably will decline in coming months as major banks halt repossessions and review their foreclosure practices.

Lenders took over 102,134 properties last month, RealtyTrac Inc. said in a report today. That was the highest monthly tally since the company began tracking the data in 2005, surpassing the August record of 95,364. Foreclosure filings, including default and auction notices, rose 3 percent from the prior month to 347,420. One out of every 371 households received a notice.

Sales of properties in the foreclosure process accounted for almost a third of all U.S. transactions in the month, a sign that a prolonged delay in repossessions may hurt the housing market, RealtyTrac said. Bank of America Corp., the largest U.S. lender, said Oct. 8 it would curtail foreclosures across the country, while JPMorgan Chase & Co. and Ally Financial Inc. stopped seizures in 23 states where court approval is required.

“We’re talking about loans that are almost certain to be foreclosed on,” Rick Sharga, senior vice president of Irvine, California-based RealtyTrac, said in an interview. “The delays are only providing a stay of execution.”

Attorneys general in all 50 states began a coordinated investigation yesterday into whether lenders used false documents and signatures to justify foreclosures. Banks and mortgage companies would be “well served” to cooperate with the probe and should consider negotiating settlements with borrowers in cases of potential fraud, Ohio Attorney General Richard Cordray told Bloomberg Television. ............(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601087&sid=aHQFhGTnCNc0&pos=7

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1. Grapes of Wrath, pt II

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