2 Million Homes under Foreclosure Cloud
House Predictor.com has conducted a survey after analyzing the country’s largest metropolitan real estate markets. It forecasts that within two and a half years 2 million homes will be foreclosed. 50 US states comes under this dubitable distinction. So far the site has been 85% correct in its conclusions.
Housing Predictor gives details about the foreclosure tsunami in America and how the virus of the sub-prime loan calamity is gnawing into the conventional mortgage market. Topping the list are Michigan, Ohio, Minnesota, Nevada and Colorado. Next in line and about to catch up are California, Alabama, Indiana and Mississippi.
The apprehensions of House Predictor are echoes of what The Center for Responsible Lending has already estimated. The latter gives a very grim picture. About 2.2 million houses will come under the hammer of foreclosure during the same period of two and a half years, as a result of the sub-prime hiccups.
Some researchers are of the opinion that the infection has not spread into all the real estate markets on a big scale. In eighteen states the local housing markets are appreciating. Signs of stabilization are apparent in 10 other property markets. A phenomenal increase in adjustable mortgage rates have spiked off this disaster. At the root of it all is unethical lending by agents and accepting of the same by borrowers without thinking of the risk involved.
Researchers have found a link between high number of foreclosures and mortgages made to sub-prime borrowers. The latter fell into the trap because their credit history was questionable. As such they agreed to any terms to somehow realize their dreams – have a house of their own. Little did they realize that they were mere stooges in the game of big money. The housing market of the country had hitherto appreciated, egged on by falling interest rates and liberal lending rules. This had gone on for five years only to slow down in some regions.
Another discovery was that mortgages made to first-time investors were being foreclosed. The U.S. Commerce department said that prices of vacant private houses had reached an all time high level. Many investors had bought properties with the hope of making a fast buck by selling it to a new buyer before the market reached its peak. However now the situation is that they can neither rent out or sell their properties without suffering heavy losses.
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