Ninety Percent Increase in US Home Foreclosures

Posted on March 3rd, 2008 by saman

Seizures of homes in the United States have doubled during the first month of 2008. Property owners are unable to make the high payments on their adjustable-rate mortgages. Total foreclosure filings increased about fifty-seven percent.

Repossessions increased about ninety percent according to RealtyTrac. RealtyTrac sells statistics about foreclosure to over one million properties. Rick Sharga, of RealtyTrac says that the most troubling thing about the current trend is that more and more properties are going completely through the foreclosure process and being returned to the banks.

Homeowners who have defaulted on subprime loans and those who were not able to pay the higher payments on adjustable rate loans caused the filings for foreclosure to increase. This increase is the highest it has been since August of last year. This increase is also the second highest increase in three years. Later this year four hundred and sixty billons dollars worth of adjustable mortgages will be reset. This will raise the minimum payments for homeowners. And additional one hundred and ninety billion dollars in subprime adjustable mortgages will also be reset this year.

Over two hundred and thirty-three properties were in default in January. Foreclosure filings increased a total of eight percent. This percent came between the end of last year and the month of January.

President Bush had presented a proposal to congress that is supposed to help one million homeowners avoid foreclosure. Foreclosure would be avoided with tax-exempt bonds. However, this proposal has done little to slow the number of defaults.

Housing agencies of some states are turning away many potential home sellers because the homes have lost too much value. The prices of homes in about twenty U.S cities fell during the end of last year by the largest amount on record. Across the nation, the prices of homes fell eight percent during last year’s fourth quarter. This decline is the biggest decline in twenty years.

Mark Zandi stated that considering the collapse of housing values, many homeowners soon realize that they will never truly own a home. These homeowners are giving back their keys and not fighting to keep their homes.

A number of states have recorded the highest number of foreclosure rates. These states are Nevada, California, and Florida. Nevada leads the nation in the rate of foreclosures. Over six thousand homes were in default or were repossessed. California had fifty-seven thousand properties facing seizure in January. Florida had thirty-thousand homes in foreclosure or default. States such as Georgia and Michigan also had a large number of defaults in terms of people who have missed payments and seizures of property.

Banks will most likely to be forced to resell what might equal to about one million foreclosed properties. This will add to the enormous inventory of homes and this will force prices down even more. January was the sixth month in a row with over two hundred thousand foreclosures. Home prices fell for the first time since The Great Depression. That made it difficult for the owners of homes to sell or refinance. The inability to sell or refinance their homes was encumbered by mortgages that were higher than the actual value of homes.

The US Treasury Department is leading an effort to give thirty day foreclosure freezes. Homeowners who are delinquent will be given additional time to arrange plans for payment. Companies such as Fannie Mae, Wells Fargo, and Bank of America will help with the effort.