The measures passed by the congress to help homeowners facing foreclosure. and those who are currently behind on their monthly payments, seem to have not made a significant impact. This is quite understandable as the price declines have not stopped in most of the country - and in my opinion, this needs to happen along with  stabilizing or gradual declining in the real estate inventory levels. These two will stem the foreclosure tide and thus save banks form the ever increasing REO property inventory (non-performing assets).

According to RealtyTrac, “Nationwide, the number of total foreclosure actions rose to a record 303,879 in August – including 119,059 default notices, 93,927 sale notices and 90,893 REOs – although the year-over-year increase slowed to 26.69 percent last month from July’s year-over-year gain of 55.12 percent. Compared with the month before, foreclosures rose 11.65 percent after rising 7.85 percent in July.”

The numbers certainly don’t bode well for the lenders and banks trying to get out of the current mess. The deceleration in the inventory increases year-or-over is quite apparent, but nevertheless, 27% Y-O-Y is still a huge jump. Unless the mortgage lending gets back to normal, the number REO properties available from various national banks will see no abatement soon. The flood of new REO auction houses is a good indicator to indicate the bullishness for the continuing reo inventory increases at all the major lenders.