Banks Ignore Delinquent Borrowers - CNBC

There is always a story behind the headlines you just have to look hard sometimes to find it. In this case the Government/Wall Street leads with the idea that the foreclosure filings were down 9% in April. What they didn't explain is that the reason for the dip is that the banks aren't foreclosing even though people haven't paid their mortages.

From Realty Check
Diana Olick
Some encouraging signs on the foreclosure front may not be as rosy as some are reporting.

RealtyTrac, the online foreclosure sale site, shows a 9 percent dip in the number of properties with foreclosure filings in April, month-to-month.

The driver of that dip is a big drop in new notices of default.

The final stage of foreclosure, that is bank repossessions (REO) shot up to a new record high, up 45 percent from a year ago.

When I first read the report I thought, okay, we knew there was a big pipeline of loans that would not get modified and would have to come out the end at some point; now is that point. The fact that fewer loans are going into the pipeline should be our focus, and that's a positive. That's what I thought until I interviewed RealtyTrac's Rick Sharga.

"People are sitting in their houses not paying their mortgages, and the banks are letting those delinquencies extend longer and longer periods of time before they put them in foreclosure," Sharga told me.

Banks Ignore Delinquent Borrowers - CNBC