Foreclosure Crisis Still Rearing Its Ugly Head

by on Foreclosure Crisis

It seems that the tough times in the market are still not over. If you check out the data gathered from the month of July, it shows that foreclosure filings increased by 8 percent from the previous month and 55 percent from last year of the same period. There is actually one out of 464 homes in the United States which has entered some stage of foreclosure.

Among the many foreclosure properties, the real estate owned properties are the ones which are considerably growing in number over the past year.

According to the online marketer Realty Trac, there were 680,000 homes which were repossessed since August 2007. These bank foreclosures are increasing dramatically among the other foreclosure properties, resulting to a market with bloated inventory of REOs. Combining this with sluggish home sales activity, you will have a housing market that looks quite grim.

States which have the highest foreclosure rate include Nevada (one filing for every 106 homes), California (one filing for every 182 homes), Florida (one filing for every 186 homes) and Arizona (one filing for every 195 homes).

In California, there is a high percentage of bank repossessions for the month of July. All in all, there were 23,406 REOs, up from 4,444 for July 2007 and 20, 624 for June 2008.

Most of these California bank foreclosures were bought during the last housing boom when predatory lending practices were rampant. When the subprime mortgage industry collapsed under the overwhelming number of defaulted mortgages and home prices started declining, millions of homeowners found themselves with mortgage debts that are larger than what their properties are currently worth.

At present, there is the new housing bill scheduled to be implemented on October 1. The said bill contains provisions that will provide areas hardest hit by the mortgage mess financial support so they can address the problems that the housing crisis have caused. Local governments will be given funds to buy these foreclosure homes, renovate them and sell them once again at an affordable price.

Hopefully, the new housing legislation can jumpstart the recovery of the housing market.