By JON PRIOR
Two major banks are expecting major increases in foreclosures, by the end of 2010.
According to the Irvine Housing blog, Bank of America (BAC: 18.66 +0.38%), which currently forecloses on 7,500 homes every month will see that number rise to 45,000 by December 2010 as one senior executive pointed out at a recent trade show. However, a spokesman for BofA told HousingWire, he could not confirm the numbers and they do not reflect a public position of the bank.
JPMorgan Chase (JPM: 46.14 +0.35%) is forecasting bigger foreclosure numbers in the coming months. According to a presentation at the end of February, JPMorgan expects the amount of real estate owned (REO) properties in its portfolio to reach between 33,000 to 45,000 in Q410. By comparison, in Q409, REO inventories were at 23,100.
A property becomes REO after it forecloses and is repossessed by the bank. While those without access to the big bank REO vaults are left to speculate the exact count, many in the industry believe that an expertise in how to liquidate these properties will prove vital to a recovery.
BofA does anticipate a rise in foreclosure activity through the coming months as homeowners slip into delinquency, fail to qualify for or fall out of loan modification programs. The spokesperson said while BofA is preparing for contingencies, they will not go public with any projections as the focus remains to prevent as many foreclosures as possible through both its private modification program and the Home Affordable Modification Program (HAMP).
According to the latest figures from the US Treasury Department, BofA placed 24% of the more than 1m HAMP-eligible loans into active trial or permanent modifications.
Wells Fargo (WFC: 32.42 +0.37%) declined to forecast future foreclosure levels. Citigroup (C: 4.64 +1.98%) did not respond immediately to inquiries.
URL to original article:
http://www.housingwire.com/2010/04/08/big-banks-prepare-for-major-rise-in-foreclosures-ending-2010/
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