Foreclosures Jump 57 Percent
: Foreclosures have significantly grown in the past year compared to the previous year’s figures, which means that more people have lost their homes to foreclosures this year.
A mortgage research firm said that foreclosures have spiked 57 percent this year compared to last year’s rate as banks and lenders were compelled to foreclose on properties of borrowers who have delinquent loans. At least 233,001 homes have received a notice of default for an overdue loan,
which is significantly higher than the 148,425 notices sent last year, and half of this number involves first notices.
The rise in foreclosures seem to be still happening despite risk-mitigation measures being done by lenders to aid borrowers in coping with their loans like loan modification programs, payment extension plans and other similar schemes.
More people are still defaulting on their loans, increasing the number of properties that revert to banks’ ownership. The nationwide rate shows that 1 out of every 534 homes has been sent a foreclosure notice.
In Florida, Cape Coral-Fort Myers posted the most number of foreclosures for a metro area in the entire country, with a 1:86 ratio of homes being in some stage of foreclosure. In close second is Stockton California where the foreclosure filing rate is one out of every 97 homes. Southern California’s Riverside-San Bernardino metro area ranks third with 1 out of every 101 foreclosure filings. The January figures are 8 percent steeper than the December rate.
The survey included notices of default, notices of auction sales, and bank repossessions. Normally, it takes around three months of default before lenders decide to send delinquent borrowers a default notice.
But it looks like any effort to accommodate the concerns of troubled borrowers has not improved the foreclosure situation, and the loan modification program has not really given any substantial result that will indicate that the market and the situation is improving.
Last month, bank repossessions have increased 90 percent compared to January of 2007. The figures show that a lot of homeowners still do not have or have little equity on their homes and that this situation could lead to increased foreclosure vulnerability on their part and the continued slow market sales growth.
But still, the worst may not yet be over as another mortgage rate adjustment, which could again force many homeowners to go into default, is expected in May and June next year.
