When The Bank Forecloses On The Wrong House — What's Going On With Home Repossessions?

Banks make mistakes. Often, they’re easily rectified, but sometimes they’re not.

That was the case for the owners of a home near Twentynine Palms, California, who lost their possessions after a bank mistakenly foreclosed on their residence in 2012. Alvin and Pat Tjosaas returned to their home to discover that all their belongings had been stolen.

The sheriff’s department quickly discovered that Wells Fargo had taken their possessions when it sent a crew to secure the home, which the couple did not have a mortgage on. Although the bank emptied the wrong home, it was unable to return any of the couple’s possessions because they had been disposed of so quickly.

But in most cases, banks get it right and seize homes when borrowers fail to make their mortgage payments. The lender typically repossesses and attempts to sell the house.

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And while foreclosure filings dropped in July, the number of lender repossessions continued to climb, according to a report from real estate data analytics firm ATTOM.

ATTOM’s July 2023 U.S. Foreclosure Market Report shows 31,877 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — down 9% from a month ago but up 5% from a year ago.

“The slight decline in foreclosure filings we are seeing is yet another sign of a rebounding housing market,” ATTOM CEO Rob Barber said. “With home prices back up, several factors have combined to put more financial resources in the hands of homeowners, providing more options to avoid foreclosure. However, given the U.S. housing market remains in flux, the various forces at play could keep the market improving or turn it back downward over the coming months.”

Lenders repossessed 3,332 U.S. properties through the foreclosure process in July. That’s up 4% from June and 9% from last year. States with the greatest number of repossessions were Illinois at 355; Pennsylvania at 230; California at 217; Michigan at 200; and Texas at 200.

One in every 4,380 housing units in the U.S. had a foreclosure filing in July. States with the highest foreclosure rates were Maryland, 1 in 2,071; New Jersey, 1 in 2,335; Delaware, 1 in 2,343; Illinois, 1 in 2,430; and South Carolina, 1 in 2,511.

States with the largest declines in foreclosure starts were Hawaii, down 51%; New Hampshire, down 45%; Idaho, down 43%; Arkansas, down 40%; and Alabama, down 38%.

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