Banks Frantically Dumping Foreclosed Homes

May 14 (EIRNS)--The unbroken surge of U.S. home foreclosures over the last 20 months, has led many banks, which own a glut of repossessed homes, to begin selling them, and pushed the U.S. banking system deeper into bankruptcy. Were these banks anticipating this obvious consequence that LaRouche warned of? It is now time to solve this mess, surely not by leaving it up to the irresponsible banks. Here are some reasons why:

**At an auction of 100 banker-repossessed homes, held May 12 in San Diego, America's eighth most populous city, "houses and condos typically sold for 30% below the previous sale or appraisal prices," the May 14 Wall Street Journal reported. "In a few cases, discounts were around 50%." Previously in San Diego, an inventory of 8 to 9 months of unsold condo homes was considered typical; currently the city has an inventory of 29 months!

**The May 13 Detroit Free Press reported that by the end of the first quarter 2007, in metro Detroit, one in every 51 households has filed for foreclosure, the highest rate for any major city in America. This has driven down home prices. Ron Simpson, Detroit Association of Realtors President, stated, "In the past, foreclosed or distressed houses were not considered as part of the appraisal process, but because they've become such a norm in this market, they are assessed as any other home. Because they are included, they are driving the values down."

**The Charlotte, North Carolina-based Lending Tree, one of the most heavily advertised mortgage lending institutions in the nation, announced May 11, that it will fire 440 workers, one-fifth of its 2,200 person workforce.

**Four mortgage lending institutions have gone under since April 27: Millennium Lending, a non-prime mortgage lender; Dana Capital Group, a mortgage lender; Nation One Mortgage, an Alt-A lender; and Homeland Capital Group, a mortgage lender. This brings to 66 the number of mortgage lenders that have failed since late 2006.