July strikes a hike in foreclosures – Economy will take time to recover

After the Great Depression of 1930, US economy saw yet another major recession in December 2007, which ended in 2009. The effects were really harsh. The American economy became weak and a number of problems occurred.

• Economy faced the problem of acute unemployment and underemployment.


• Housing industry collapsed.


• Consumers became pessimists.


• Mortgage crisis began and foreclosures reached new heights.


July 2010 is just another example when foreclosures created havoc. The readings of July came up with mixed messages. Foreclosures in July increased by 3.6% compared to the rate of foreclosures in June. However, when the data of July 2010 are compared with those of July 2009, it was found that the foreclosures went down by 9.7%. The foreclosure filings for the month of July were at 325,000. These filings included bank repossessions, default notices as well as auction notices. With this figure of 325,000, July became the 17th month at a stretch when the foreclosure filings shot up beyond the mark of 300,000.

Though there was a decline in the number of default notices for 6 consecutive months, the good sign was negated by a hike in bank repossessions for 8 months at a stretch. Almost a record was created in the month of July by number of people losing their homes, because they were facing problems with the repayment of the mortgages. Lender repossessions reached to a level of 92,858 in July 2010, which has claimed the second highest position after May, when the number of repossessions was at 93,777. Repossession of a property is the last and final stage of a foreclosure process, in which the banks take possession of the properties or sell them through auction. Until then, the homeowners are allowed to stay in their properties.

This hike in foreclosures has good news for those who are looking forward to buy a preoccupied property. This is because of the fact that as the number of repossessions is increasing, the banks are increasing the discount rates for the properties to sell them quickly and this will mean a considerable amount of savings for the prospective homebuyers.

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