Foreclosures on the Warpath Scorning All Relief Measures
New statistics pouring in show that foreclosures are on the warpath scorning all relief measures. The housing market is getting worse without showing any signs of peaking.
Across USA foreclosure postings increased by 8% in July from June of this year. Banks repossessed 77,295 houses – a rise of 183% from the previous year of 2007.
Foreclosure is a judicial process by which the lender takes the permission of the court to seize a mortgaged house when the borrower fails to make payments. The house is foreclosed upon after the borrower is duly warned. It is then sold at a court auction by which the lender realizes his unpaid dues. Today there are so many foreclosures that the banks are suffering form indigestion – having swallowed more than they can manage. Vacant foreclosed houses are creating another set of problems. For every one house the banks manage to sell, two more roll into the foreclosure net.
Ken Cleypool is a realtor working with Value Point Financial. He says that his office is overwhelmed with foreclosure related work. They have 65 listed units and 90 more are coming in. Three years ago it was half that number. According to another analysis there are 40,000 foreclosures entering the market each month in USA. The forecast is that before this year draws to a close in December the number will reach a peak at 70,000. Nearly 20% of the houses waiting to be sold coming from the foreclosure category are damaged. This is the natural outcome of frustrated house owners who vent their rage on the property they could not enjoy. Cabinets, sinks and faucets are ripped out together with fittings and fixtures. The damage is sometimes so extreme that it becomes difficult to sell the units. There are huge discounts but even then maintenance and repair bills fill up the gap. Discounts from 25% to 20% are offered.
This is a grand opportunity for investors and also for first time nest builders. Lisa Walt of Grand Rapids helped her son to buy his first house. It might need repairs but nevertheless it was a bargain. The problem is that although houses are going for peanuts one needs a good credit to be able to make the offer. The foreclosure crisis has shaken the mortgage industry and the group has tightened their lending practices making it difficult to get loans.
Related Posts
