Foreclosures in the Valley Have Plunged to a Record Low
The US economy is in the grip of a deep Recession. Joblessness is rampant and subsequently people are unable to make mortgage payments. Hence, foreclosures have become common in various regions of the US. However, the scenario is different in a region called the Valley, where foreclosures have dropped. Foreclosures plunged to 3,939 in August, according to data available with the Information Market/Cromford Report. It is not clear what that means.
Last month, foreclosure filings in Phoenix had decreased by 26 percent in comparison to July. Pre-foreclosure numbers also plunged by 4 per cent. Foreclosed homes for sale also decreased by 6 per cent. This is the lowest mark. It may be noted that all indicators dropped in the same month this year. This happened first this year.
An analyst with Information Market, Tom Ruff said that it is not very clear why the foreclosures decreased. One of the reasons being cited is the Federal government’s new program of loan modification by which home owners are getting assistance in down payment. Arizona’s law on foreclosure has also been changed and the decline in foreclosures can be attributed to that.
The decrease can also be because of banks being flooded with paperwork on foreclosures. As the lenders remain steeped in activities pertaining to loan modification, they do not have the time to foreclose on homes. That is also giving homeowners some time to evade foreclosure.
Of course, there is some substance in each of the reasons but the housing market in the Valley is still steeped in problems. Home values have crashed to abysmally low levels. Foreclosed homes have been put for sale in the market but there are few takers. Now banks are taking steps to assist homeowners through short sales and mortgage modification programs.
It may be noted that Making Home Affordable Program that was flagged off in March has had many hiccups till date. This has frustrated many homeowners in Phoenix. According to reports available with the Federal government, only 15 per cent of the eligible homeowners have received loan modification. Of that, only nine per cent has received loan modification on trial. The government is trying hard to shore up efforts and help another 500,000 homeowners within November.
Short sales have also increased in recent times. This allows borrowers to sell homes at lower prices than what they owe on their homes. Lenders have increased short sales of homes.
