February Experienced Increase in Foreclosures

March 25th, 2009 | Tags: Foreclosure Market

February was the month President Obama released his foreclosure prevention measure of $275 billion. Ironically February experienced an increase in foreclosures according to the findings of ReatlyTrac. The increase was by 30% touching 290,000 houses, in comparison to February 2008. This year in February 440 householders received foreclosure notices. It was 6% higher than the figures of January 2009.

RealtyTrac has been recording foreclosure statistics across more than 2,200 counties from 2005.

The February figures were the third highest after August 2008 and December 2008. The increase was in sharp disparity with the drop in foreclosure and pre-foreclosure postings in January.

Across America the total number of foreclosures in January this year dropped y 25.7% touching 72,694. In December 2008 the number was 97,841. The pre-foreclosure numbers also fell by nearly 12% in January from December. The numbers in December and January being respectively 190,467 and 166,860.

The spike in February is reasoned to be because of delays in the foreclosure process that only postponed the pain of the real estate market. When the 45-day moratorium on foreclosures ended during the last week of January in Florida, the number of foreclosures shot up sharply.

RealtyTrac said that this moratorium delayed proceedings also in New York resulting in a high jump increase of 23% noting the resumption of foreclosure activity in February.

Rick Sharga the vice president of RealtyTrac said that there has not been any progress in the battle to put an end to the housing crisis despite the wide measures being taken to assist the owners of foreclosed properties.

More moratoriums on foreclosures are scheduled to come to an end. It is feared that this will lead to increased foreclosures and swell in repossessed houses through 2009.

The Bank of America however has said that it will further extend its moratorium on foreclosures. It will be on a weekly basis, as the position of borrower’s capability to continue with mortgage will be regularly assessed against the background of the rolling forward of new Obama initiated measures.

Meanwhile a new batch of storm clouds are gathering as the option-arm as well as the Alt-A loans amounting to be worth something between $60 billion to $70 billion are poised to reset in the forthcoming quarter of this year. It is apprehended that this, together with unemployment will cause havoc in foreclosure numbers.

Leif Thomsen CEO of Mortgage Master Inc. commented that many borrowers who bought properties that they could not afford from the very beginning should now be prepared to accept losses and the inevitability of foreclosure.