Foreclosure Rates Soaring

by Peter Vernon on Foreclosure Rates

The year 2007 has been marred with poor performing mortgage loans and experts believe that this will only become worse as the year proceeds. According to Moody’s, there will be many more delinquencies leading to bank foreclosures this year. Almost 2.5 million mortgage defaults are expected in 2008 and delinquencies are expected to peak by the end of the first quarter and around the onset of summer. The expected delinquency rate responsible for such a high number of foreclosed homes is 3.6%, which will be a jump of 2.9% as compared to the first quarter rates of 2007 and increase the number of government foreclosures.

As always the main culprit behind the high number of foreclosure homes is the adjustable rate mortgages. According to experts and market analysis the foreclosure rate for the ARMs will jump by 10% as opposed to the current rate, which is 4%. In 2005, the rate was only 2.5%. According to Mark Zandi, the chief economist at Moody’s, “The economic fallout from the devolving mortgage market will be substantial, but conditions would be even worse if not for a continued generally sturdy job market.”

This simply means that there will be more foreclosure homes in 2008 as compared to the previous year. Although on one hand this seems like an inevitable situation, on the other hand this is also a beneficial situation for investors. Most of these homes are listed in various foreclosure listings and are sold through a public auction. Hence, this is the best time to invest in foreclosures for sale. The main benefit that you can draw is that you will get the homes much cheaper and there is a wide variety of homes to choose from and all you need to do is become a member of