In comparison to July 2007, this year bank repossessions reached record heights in USA. Foreclosures rose by 55% during the same time according to reports released by RealtyTrac.
Over 272,000 units calculating to 1:464 went into foreclosure. By foreclosure is meant any of the three stages – default and auction notice as well as bank repossessions. In July the number of foreclosures jumped by 8% from the previous month this year. July saw 272,171 foreclosures – slightly less than the record number 273,001 in May 2008.
According to Rick Sharga of RealtyTrac, even these figures are on the conservative side because some states like New York and California imposed foreclosure moratoriums in July. This cannot be a permanent measure. The foreclosures kept at abeyance will hit the market few months later.
Among all the foreclosure related activity the bank repossessions were the most active. Year-over-year there has been an increase of 184% in foreclosure listings, 53% in default warnings and 11% in auction notices according to RealtyTrac.
Banks repossess the units when these fail to be sold at county auctions. A year ago bank takeovers made up 16% of foreclosure related operations but this year it is 28%. In 2006 banks owned 224,000 foreclosed units but slowly the figures rose to 445,00 in 2007 and till July 2008 775,000 properties respectively.
The staggering volume of foreclosed houses is impacting on the housing market and sharply causing prices to fall. Of all the present houses that are listed for sale, 17% consists of foreclosed homes.
Two months ago Henry Paulson, the US Treasury Secretary had stated that 1.5 million foreclosures had kicked off in 2007. About 2.5 million are ready to do so in 2008. Even these figures are a small percentage of the impending foreclosure numbers. Before 2012 dies down about 6.5 million houses will be foreclosed according to Credit Suisse. This means 12.7% of the borrowers (8.4% of all owners of houses in the country) will be losing their properties in the forthcoming 5 years.
Credit Suisse anticipates that in the current year (2008) the values of houses will drop by 10% and by 5% in the following year (2009). 63% of all those who had taken sub-prime loans will have a negative equity in 2009. Last year it was only 30%. About one third of those who bought in 2003 have no equity at all. It means the loan is bigger than the value of the house. According to Zillow.com (property appraiser) 45% of those borrowers who bought property in 2006 are down under.
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1 North Carolina Bank Foreclosures Change The Picture of Sunny Prosperity | eRepo Homes // Oct 22, 2008 at 9:15 am
[...] houses that are in the different stages of foreclosure from notice of default to court auctions and bank repossessions. As the banks are usually the lenders reference is made to North Carolina bank foreclosures. [...]
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