Properties in Bank Foreclosure Listings Reached 1 Million So Far in 2009

by on Foreclosure Rates

The Center for Responsible Learning (CRL) has estimated that properties added to bank foreclosure listings reached 1 million so far in 2009. This data do not bode well to the Obama Administration and the real estate industry’s efforts to fight foreclosures to stabilize and strengthen the housing market.

The CRL estimates followed the Mortgage Bankers Association’s (MBA) National Delinquency Survey for the first quarter of 2009 which showed that about 12 percent of mortgage loans are at risk of being added to the growing bank foreclosure listings. According to the MBA, the figures are the highest it has ever recorded since it started tracking the mortgage industry 37 years ago.

CRL President Michael Calhoun said that the rapid increase of foreclosure proceedings on all types of mortgage loans is alarming. He pointed out that foreclosures has brought devastation to the economy and neighboring families living in areas severely affected by foreclosed homes. He added that foreclosure is the root of the housing crisis and it will continue to wreak havoc on the market if it will remain unabated.

CRL estimated that 2.4 million properties are at risk of being added to bank foreclosure listings in 2009. And without a doubt, foreclosures have reduced market values of about 70 million properties, totaling $502 billion or $7,200 each family.

CRL predicted that the number of households affected by foreclosures will increase to about 9 million and incurred losses of $1.9 trillion in terms of lost home value to nearly 92 million neighboring families.
According to industry experts, based on the track record of the mortgage industry so far, loan modifications will not succeed if the programs will fail to provide affordable monthly payments to distressed homeowners.

Because of the immediate need to address the foreclosure problem, the Obama Administration has developed a plan that includes enhanced incentives for mortgage loan companies to encourage them to work out loan solutions with distressed homeowners.

The Obama Administration’s revised guidelines encourage early intervention and modification of loans to reduce monthly payments and make them affordable to homeowners to help them avoid bank foreclosure listings.

Industry experts believed that about 6,500 foreclosures are being filed daily. They call on loan servicers and lenders to work out solutions with homeowners to increase loan modifications and help people keep their properties away from bank foreclosure listings.

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