If the current foreclosure crisis were a football game, we would be in half time right now. Based in large part on new data that was recently released it appears as though the foreclosure crisis is only about halfway over.
New home foreclosures recently increased while the number of borrowers falling behind on their payments decreased slightly. Not surprisingly, borrowers with subprime adjustable mortgages saw the biggest jump in foreclosures recently.
Almost 5% of all subprime loans recently entered into the foreclosure pipeline, up from 3.6% in the second quarter. One of the main reasons for that increased foreclosure spike was the expiration of the foreclosure moratorium placed on a number of states. In other words, many states were recently given the go ahead to file new foreclosure actions against borrowers who have fallen behind on their payments.
Additionally, another reason for the recent spike in foreclosure activity is that many of the borrowers who have fallen behind were not approved for a loan modification or other program to help save their home.
On the other hand, the pace of new foreclosures for all loans for this time last year was actually down. Simply put, there were less foreclosures filed at the same point this year than there were compared with last year at this point in time.
Overall, the pace of new foreclosures for all loans was up by almost 11% in the third quarter from 9% in the prior three-month period. That’s down from 1.3% in the same period a year ago.
As for the overall health of the nation’s current real estate market, a lot still depends on the economy of the whole. The economy is still not producing jobs fast enough to aid the nation’s housing market.
Additionally, continued improvement in home sales and home prices will depend heavily on the volume of foreclosed homes in the housing market. Recent housing data suggests that many lenders have barely made a dent in the overall inventory of foreclosed homes.
As such, there is no question that this is a buyer’s market. Indeed, South Florida’s real estate market has picked up some steam recently due in large to foreigners investing in South Florida.
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If you are facing the prospects of having your home foreclosed on, or if you are seeking to purchase a home in this current market, please contact us today for a free consultation.