Foreclosure Numbers Increase in January
In January this year foreclosure numbers increased by 15% from what it was in January 2009. It is however less than the figures of last December. Economists fear that another wave of foreclosures is about to crash on American shores. Over 315,000 families got a foreclosure notice (the word foreclosure referring to any of the stages of the process). It is 10% lower than the December figure of 349,000 – the latter number being the highest since RealtyTrac started noting the numbers in 2005.
Last January the foreclosure rate was 1:409 in USA. The banks took over 87,000 residential houses – the number being 5% less than that of December but an increase of 31% from 2009 January.
January was the 11th running month wherein over 300,000 units have fallen under the foreclosure cloud. It is apprehended that the numbers would continue to remain at a high level because the borrowers who are unemployed can no longer manage mortgage commitments.
Fannie Mae reported towards the close of January this year that traditional borrowers are defaulting by 5.29% in November – it being double that of 2008 November when the proportion had been 2.13%. A borrower is considered delinquent when payments have not been made for 3 consecutive months.
Patrick Newport of HIS Globla Insight said, “There’s a lot of foreclosures in the pipeline, and the number is going to continue to get bigger.”
The pattern of foreclosures in January 2010 was similar to that of the previous year with double digit jump in December followed by 10% decrease in the following month of January. The latter most probably has been caused by delay in processing by the lenders due to the winter holidays commented Rick Sharga of RealtyTrac of Irvine, California. Sharga said, “I don’t think it’s an early sign of the coming of the end of the foreclosure crisis.”
2009 saw record numbers coming under the cloud of foreclosures – 2.8 million borrowers. It is feared that in 2010 this number will go up to touch 3 million to 3.5 million according to RealtyTrac.
For economic recovery to be real the first thing required would be slowing down the pace of foreclosures. The housing crisis has compelled the Federal and State Governments to launch plans either to prevent or delay the process so as to help the borrowers. The foreclosed houses are generally sold at heavily discounted rates and this is lowering the value of the adjacent properties.
