U.S. Housing Market Ravaged By 1.5 Million Record Foreclosure Filings

U.S. Housing Market being hit badly by the sheer volume of houses going into foreclosure hit a new record a 1.5 Million Foreclosure Filings. Recent job losses and falling property hikes deepened the house market recession.

More than 1.5 Million home owners’ received an auction notice or default or were seized by banks in the last six months through June, according to the Irvine, a California-based seller of default data. A huge 15 percent hike from the year earlier. 1 in 84 of U.S. households received a filing.foreclosure

According to Richard Green, director Lusk Center for Real Estate at University of Southern California ; “People are losing their jobs, seeing their income go down and are underwater on their mortgage……….. It’s a toxic combination”.

20 major major U.S. metropolitan areas suffered a drop in housing prices, almost 18.1% drop in April from a year earlier, according to the S&P/Case-Shiller index. Also, the unemployment rate climbed to 9.5% in June, a record since 1983, bringing number of lost jobs to a total of almost 6.5 Million since the economic slump (started in December 2007), the Labor Department said.

Default spread through Borrowers with poor credit histories spurred for the housing market recession and spread next to the prime borrowers as sales decreased. On May 28th, the Mortgage Bankers Association said that prime fixed-rate home loans to the most creditworthy borrowers accounted for 29% of new foreclosures in the first quarter, the biggest share of any type of loan.

1/8 Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said.

Nevada, California and Florida Leading Foreclosure Rates

Around 20 out of 50 U.S. counties with the highest foreclosure rates turned out to be in California and around 12 were in Florida, according to RealtyTrac said.

The highest rate in the nation was found to be in Nevada, home to Las Vegas. It had the with one in every 13 households receiving at-least a filing. According to RealtyTrac. Lee County, Florida, home to Fort Myers and Cape Coral, ranked second at one in 14. 3 counties were at tie for 3rd place at one in 15 households: California; Osceola, Merced, Florida; and Lyon, Nevada.

Riverside, California ranked 6th; Nye, Nevada was found to be 7th; and San Joaquin, San Bernardino and Stanislaus, all in California, ranked 8th through 10th.

No Way Back

According to Donald Haurin, “I don’t see any turning of the tide,” an economics professor at Ohio State University in Columbus. “The effect of more foreclosures will be continued downward pressure on house prices, and lead to difficulty making mortgage payments that are continuing to reset.”, he said in a statement.

Payment-option on adjustable rate mortgages may contribute to greater defaults, said Rick Sharga, Exec. VP of RealtyTrac. Option ARMs allow borrowers to pay less than the interest they owe each month, tacking on the difference to their total debt and creating the potential for larger bills for the future.

Around 3/4th (three by fourth) of loans taken will require higher payments in the near future and in the year 2011, with the peak expected in August 2011 when around 54,000 loans recast, suggested the data from First American CoreLogic of Santa Ana, California.

President Barack Obama’s $275 billion assurance to jumpstart sales and encourage banks to modify sour loans as well as Government and lender-supported plans to help troubled homeowners — have had little or hardly any effect, Haurin said.

Fresh Approaches

According to Sharga, As many as 3.2 million U.S. households will get a foreclosure filing by the end of the year.

“Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue,” RealtyTrac’s CEO James Saccacio, said in his statement.

Around 8.3 Million U.S. house owners owed even more than their houses. Additional borrowers will land in trouble because of their loans, if prices further decline around 5%, First American said on March 4th .

Foreclosure filings in the 2nd quarter numbered by to a record tally of 889,829, up 11% from the 1st Quarter and up 20% from a year earlier. Total June filings were estimated to be around 336,173, 3rd highest monthly total record, since January 2005.

The highest foreclosure hit state was Nevada with 1 in 16 households receiving a filing.  Around 68,708 properties were hit by this situation, 61% more than in the first half of 08.

Situation In Top 10 States

Following Nevada’s footsteps was Arizona, the second highest foreclosure rate, one in 30 households; Florida was next taking third at one in 33; and California ranked 4th at one in 34. Other states in the top 10 included Illinois, Michigan, Georgia , Idaho, Colorado and Utah.

With around 391,611 filings, California led with an increase of 15 percent from a year earlier; followed up by Florida with 268,064 and a 42% increase.

Arizona was third with 89,799 filings, up 55% percent, and followed up by Illinois with at 4th with 68,932, up by 29%. Other states in the top 10 for their sheer number of foreclosures and defaults were Nevada, Michigan, Ohio, Georgia, Texas and Virginia.

A Better Story

New Jersey was amongst the first 25 States with highest rate, with 21st, one in 146 households, and 23,889 filings. That’s a 30% decrease from a year earlier. Connecticut stood at 27th highest rate, 1 in every 163 households, and had 8,801 filings, a 32 percent%.

New York stood at 38th, with One in 328 households receiving a filing, which fell from 19% to 24,210.

Reblog this post [with Zemanta]

You might also like

U.S. Fixed Mortgage Rates Rise from Record Lows Home funding company Freddie Mac said on Thursday that in the past week U.S. fixed home loan rates were...
An Upturn in Housing Driven by Current Mortgage Rates Over the past couple of months the housing data that has been released suggests that a housing recovery...
FBI says, U.S. mortgage Fraud Hit $1.4 billion Mortgage fraud loses of at least $1.4 billion in 2008 has been reported by the U.S. financial institutions...
Equifax: Record set by U.S. Mortgage Delinquencies Monthly data from the Equifax Inc credit bureau showed on Monday that due to high U.S. unemployment the...
New home sales in U.S. rise 11% Today we have seen another positive sign for the recovery of the housing market. This is indicating that...
Debt Consolidation Companies

People who liked this Post also read

  • The Case-Shiller Housing Index
    The Case-Shiller index is used rather widely and is one of the most respected gauges of the U.S. housing market. With the amount of information handed out to you, you might want to take a deeper look at what a Case-Shiller Index really is....
  • Home Modification Plan:Things To Know
    For those who think they are unable to repay long-term loan for the home, there is a light of hope and it really works. If you meet the criteria of Obama’s plan, there are so many easy mortgage payment options for you with reduced interest rate and extend...
  • Record 9.6 Percent of Homeowners Are Behind On Their Mortgages
    According to the Mortgage Bankers Association, a record percentage of Americans are now being late in paying their mortgages....
  • Federal House Loan Program
    The federal home improvement loan program is funded and launched by federal government to help needy people across the country to build, buy and improve their houses. The program is for both rural and urban citizens. A separate program is available for ve...
  • Get Loans without Documentation
    Sometimes it happens that you are need of very small amount and you are not having any credit in your account. Also your payday is far, in such case no fax lending is the best option. You just have to do online and fill a simple form and funds will be tra...

is an experienced IT Consultant turned Blogger, Interested in Technology, Personal Finance, Humans and Life...You and discover more about him by following RMak on twitter.

Leave a Reply

© 2011 Loan Mortgage Credit!. All rights reserved.