Bank-owned houses increasing in Nashville - WSMV News 4

Bank-owned houses increasing in Nashville

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The number of houses re-possessed and owned by banks Nashville has more than doubled in the last year.  But the number of foreclosures in Tennessee is going down.

Across Tennessee, the foreclosure rate has dropped about 39 percent over the same time last year. That's number is slightly better than the average rate across the whole country, which is 33 percent.

Although, many more houses in Nashville now belong to the banks.

The newest numbers show that as of last month, 244 houses in Davidson County were owned by banks.   In May 2010, there were only 95.

Richard Courtney, who sells real estate in Nashville, thinks banks are having a hard time selling the houses they've repossessed. They're called REOs or real estate owned properties.

People are choosing homes that weren't involved in a foreclosure.

"Now the REOs, unlike two or three years ago, are forced to compete with well-maintained houses, and they don't win," said Courtney.

Realtytrac is a company that monitors foreclosure activity. It says there's a continued weak demand from buyers, and that's making it tough for lenders to unload their REO inventory.

Bank repossessions are slowing down. But RealtyTrac says more REOs come on the market every month than are being sold.

Courtney thinks banks could avoid having so many foreclosures in the first place. If they'd help their distressed buyers with what's called a "short sale," which is when a bank agrees to let people sell their house for less than what they owe.

"The short-sale process can take 6, 8 or 9 months, so in the middle of a short-sale, a foreclosure takes place and everybody loses," said Courtney.

Davidson County foreclosures are actually up over last year by 34 percent. Wilson County foreclosures are down 27 percent. Williamson County is down 34 percent. Cannon and Trousdale counties are down 60 percent.

The highest foreclosure rate in the country continues to be Nevada, where one out of every 103 houses there are in foreclosure. Tennessee's rate is about one in 1,100.

On average, one in every 605 houses in America had a foreclosure filing in May.

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