According to RealtyTrac Inc., more than 900,000 American homes were repossessed in 2009 due to foreclosures. So far in 2010, there have already been almost 528,000 homes taken over this year from homeowners who have fallen behind on their payments. If the first half of the year is any indication of what's to come, RealtyTrac predicts that number to increase to about one million repossessed American homes by the end of 2010.
In comparison to any normal year, that number is around 100,000, so a figure of one million, according to Rick Sharga, a senior vice president at RealtyTrac., "That would be unprecedented." RealtyTrac. Inc. follows scheduled home auctions, defaulted loans and home repossessions. They have noted that home foreclosures during the first part of the year have increased by 8 per cent when compared to the same time last year, but has also mentioned that figure has decreased by 5 per cent from the latter part of 2009. They say approximately 1.7 million homeowners have received foreclosure warnings within the first 5 months of the year, which means one in every 78 homes is in jeopardy.
Home repossessions have slowed in recent months, but does continue to be a concern even though banks are allowing delinquent homeowners to stay in their homes longer, but this has only caused a backlog of foreclosed homes. "The banks are really sort of controlling or managing the dial on how fast these things get processed so they can ultimately manage the inventory of distressed assets on the market," Sharga said.
He also takes into account that there could be another surge of foreclosures if the U.S. economy remains the same with high unemployment rates and a slow economic recovery. On average, Lender Processing Services Inc. which tracks mortgages, says it takes approximately 15 months for a house to go into foreclosure and sold. With the current predicted rate, it could take into 2013 for all these backlogged foreclosures to clear. They also say found that there are currently more than 7.3 million mortgage loans in some form of delinquency.
With so many foreclosures on the market, its bound to push property values down as these houses are generally sold at steep discounts and will have an impact on surrounding homes in their area. "The downward pressure from foreclosures will persist and prices will be very weak well into 2012," said Celia Chen, senior director of Moody's Economy.com.
It can be tough when the economy simply won't snap out of the pitfalls of a recession, even with government aid such as the mortgage modification program. Instead of allowing oneself to become overwhelmed with monthly bills, it may be worth looking into a consolidation loan. When traditional banks are no longer an option, a private lender can still help. They cater to clients with bad credit in almost any financial situation.
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