Foreclosure High Jump About To Cross Magic Figure Of 2 Million!

August 2nd, 2007 | Tags: Foreclosure

Data firms are clicking and ticking figures. There is tremendous activity in the foreclosure zone with 58% surging over and above last year’s numbers during the first six months of 2007. It is a sure symptom of a deep malaise in the mortgage industry.

According to RealtyTrac, data collectors based in California, during the first half of this year 573,397 units across USA were listed for foreclosure. This includes steps in the process like receiving default notices, auction sale notices or repossession by lenders. The Chief Executive of RealtyTrac, James Saccacio is anticipating that before the year comes to an end the figures could well cross the unenviable number of 2 million. This would mean a year-by-year jump of more than 65%.

California comes first in number of foreclosures and houses having received notices. In the state about 104,572 properties were all in the soup – it was either foreclosure or default notices. The numbers since last year had more than doubled. The other states in order of ranking were Florida, Ohio, Texas and Michigan coming second, third, fourth and fifth respectively. RealtyTrac has released these figures.

The process of foreclosure broadly consists of three steps – the issuing of default notices, the foreclosure filing and the auction. 416,937 units belonged to the group that had been served notices. The countrywide foreclosure rate through the end of the month of June was one for every 134 houses.

There are many reasons behind the foreclosure scenario with the main accusing finger pointing to the sub-prime market. The latter was supposed to help those who did not qualify for conventional loans realize their dream of owning property. But gullible borrowers fell prey to the smart talk of predatory lenders. This coupled with unemployment, broken marriages and unforeseen circumstances like death and illness added to the woes. Its repercussions had a snow balling effect, which has made Walls Street and the Government wake up to protective measures. Lenders are not happy to sit on idle property. They want money to roll in. Dispossessed owners are not a happy lot. Before leaving they damage the properties. Without equity they find themselves free from houses but not from the entire loan. This makes it impossible for them to buy another reasonable shelter. Out of this Pandora-Box rises economic and social issues that will make any authority uncomfortable.

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