July 2009 Foreclosure Rise
According to data released by RealtyTrac, there has been a 7% increase in foreclosures in July. This is also a 32% increase over last year. “July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” said James Saccacio, RealtyTrac’s chief executive officer. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.” Over 360,000 households with loans received a foreclosure filing in July – the highest since January 2005.
Notices of default, auction or repossession have reached nearly 2.3 million in the first 7 months of this year. “There are a slew of factors showing fundamental weakness on the demand side: tighter underwriting, job loss, investors who’ve been badly burned,” said Stuart Gabriel, director of the UCLA Ziman Center for Real Estate. “We have not seen the bottom of the housing market.” The Obama administration’s program to tackle foreclosure has not been effective so far. Analysts say negative home equity, due to falling home prices, is encouraging borrowers to default on mortgage obligations. “It has been more profitable to put a home in foreclosure than restructure the loan,” said Diane Swonk, chief economist at Mesirow Financial. “The only thing that helps is forgiveness of principal, and there is little willingness to do that.”
The National Association of Realtors chief economist Lawrence Yun states With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,”
What does that mean for our local real estate market?
It means that we will continually see more foreclosures, more short sales and an increase in higher priced foreclosures. If you would like a daily or weekly listing of foreclosures, please complete the form below.
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