Foreclosure Plague is Spreading

October 29, 2009 by  
Filed under Blog, Foreclosure Plague is Spreading

Are Foreclosures Spreading?

The answer is yes, we have hit a record high in the third quarter. What does this mean to the common reader? Well let me explain to you, this means that 1 in 136 homes were in foreclosure! The state that has been hit the worst is clearly Nevada having 1 in 23 homes in foreclosure.  In September the number of Notice of Defaults hit 343,638, which was a relief being down 4% from August.  The bad news comes with the 87,821 homes being repossessed by the lenders.  So far to date this year lenders have repossessed roughly 620,000 homes!!

In many low price markets where the values of homes have diminished to a point of almost no value, these lenders are not following up with their foreclosures.  We are seeing more and more of this, since these lenders have a copious inventory of foreclosures.  Many people are stating that they will set a date for the auction, but never file papers.  It is not only the lender that is trying to get the homeowners out of the properties, many times we are seeing the adverse affect where the homeowner wants out immediately.  There is no point for them to live in a property that will take 15 years to gain back any equity.

According to CNN, “A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When “negative equity” approaches 50%, 17% of households default, even when they can still afford their mortgage payments.”

In addition to all of us understanding the severity of foreclosures, we may not be getting accurate numbers after all.  These numbers are not including the delay of many filing due to these lenders being understaffed.  Many are predicting that banks will take extremely long to take back these properties and put the homes that have been taken back on the market.

I strongly believe that we are only at the beginning of the foreclosure epidemic, and that this will be a bumpy ride for the next 3 years.  So hold on tight, while we pray that the government really knows what they are doing.


Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

Housing Assist Coldwellbanker