Homeowners Continue to Walk Away as Foreclosures Jump

Posted on April 29th, 2008 by saman

On April 15th it was reported that foreclosure filings rose to fifty seven percent and repossessions doubled last month. The repossessions have doubled from last year as more homeowners lost their property and mortgages increased.Over two hundred thousand properties are in foreclosure. This is equal to about one out of every five hundred households in the United States. The states of California, Nevada and Florida have the highest rates of foreclosure. Foreclosure filings increased about five percent in the month of February.Adjustable rate loans which are about equal to four hundred billion dollars are going to be reset this year. Notices of auctions have increased by about thirty two percent since 2007. This is a signal that there are increasing numbers of homeowners that are walking away from their homes and giving the properties back to their lenders instead of letting their home be put on the auction block.Many experts have said that the foreclosure crisis has not hit bottom and the process will only speed up throughout the year.Increasing foreclosures will increase the inventory in an already overwhelmed market. Home prices will remain low through next year, undermining the efforts of the government to help distressed homeowners. About two and a half million properties will be on the market this year and next. The decline in home prices in the United State will most likely double to twenty percent next year. Homes with low value will be mostly in places such as Florida, Nevada, Arizona, and California. Home owners, who have to pay mortgages that are higher than what their homes are worth, may have additional problems with higher job losses in a serious recession. There are about eight million home owners that are more than what their property is worth.There will be about two million jobs lost because of the recession so the negative economic spiral will increase. A recession usually lasts for ten months but the current recession may be twice that length. Property seizures by banks have risen over one hundred percent last month from last year. An increase in defaults among borrowers with subprime loans helped cause the disintegration of the home loan market in the United States. These defaults have caused more the one hundred mortgage companies to stop giving loans, close down, or put themselves on sale. Securities and lenders have reported credit losses of over two hundred billion dollars since the start of 2007.

As of March, the state of Nevada has the highest foreclosure rate in the United States. One out of one hundred and thirty nine houses were in foreclosure. Foreclosure filings have risen about sixty two percent from last year.

The state of California has a foreclosure rate that is the second highest in the country. One out of every two hundred and four households were in foreclosure. Foreclosure filings in this state have doubled from last year and have increased by twenty one percent from February.

Florida is the state that has the third highest rate in foreclosure filings. Foreclosures in this state increase one hundred and twelve percent from last year.