The number of metro Atlanta homes reclaimed by lenders increased by more than 30 percent last month, when compared to the same period last year, but dropped compared to last month, according to data released Thursday by RealtyTrac.
In Cherokee, Clayton, Cobb, DeKalb, Fayette, Forsyth, Fulton and Gwinnett counties, more than 2,600 homes were repossessed by financial institutions last month, compared to 2,017 in August 2009.
Repossession is the last step of the foreclosure process, when the ownership of the home changes to that of the lender.
One reason for the dramatic year-over-year increase could be moratoriums, said John McCosh, a spokesman for CredAbility, an Atlanta-based nonprofit credit counseling agency.
"Last year you had lenders not moving forward with foreclosures, which kept numbers low," he said. "The lender postponed taking possession until a later date, and for some people that later date has come."
When compared to the number of reclamations in July, August numbers fell 10 percent in the same eight counties.
Across the state, lenders took back 5,387 homes in August, 43 percent more than 3,767 homes reclaimed the year before. When compared to July, Georgia reclamations in August were down 4 percent, from 5,620.
Nationally, banks repossessed more than 95,300 homes in August, up 25 percent from the 76,100 reclaimed during the same period the year before. Repossessions across the country were up 3 percent in August from the previous month, from 92,858 homes.
August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.
Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can't afford to simply dump the properties on the market.
Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal home buyer tax credits expired in April.
That's one reason fewer than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac.
“These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer's market with too much distressed inventory for fear of what it would do for house prices,” he said.
The Associated Press contributed to this report