The big repo: $10 billion worth of foreclosed homes in May

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News item from ForeclosureRadar.com, via Bloomberg: ‘California homes representing more than $10 billion of defaulted mortgages were repossessed last month as more than 97 percent of foreclosed properties failed to sell at auction, research company ForeclosureRadar said.’

More: ‘The firm said 24,831 homes, with $10.4 billion of debt, received no offers higher than the lender’s opening bid at auction. Last month was the first time new repossessions surpassed $10 billion, Discovery Bay, California-based ForeclosureRadar said today in a statement. Still, the number of foreclosed properties bought by investors and other third parties rose almost 35 percent.’

Analysis: The market is still rolling downhill, with banks owning more California property each month. Ultimately this could be healthy in the sense that it leads to a relatively quick clearing of distressed inventory. But it puts further downward pressure on prices, and I happen to agree with those who maintain that falling prices -- not rising mortgage payments -- are causing foreclosures. In any event, it’s not a sign of a bottom; it’s a sign of continued decline.

I’ll post more from the ForeclosureRadar report later in the day.