Repossessions Rise while Defaults Drop

Lenders repossessed more homes in August than they have since the beginning of the housing crisis. On a good note, the number of houses entering the foreclosure proess declined for the seventh month in a row according to foreclosure firm RealtyTrac Inc.

Banks have increased foreclosures to clear out their inventories of bad loans. Banks repossessed 95,364 homes last month. RealtyTrac says they still have many thousands to go.

Analysts predict that this shadow inventory (homes in preforeclosure process) will prevent home prices from bottoming out, despite a national 28 percent decline in prices from 2006. In Northern Nevada residential markets the declines have been in the 50% range.