Foreclosure Scenario Alarming

In North Texas the foreclosure picture is grim. In other parts of the country it is worse. Dallas ranked 11^th. North Texas foreclosure listings hovered around 49,000. In Riverside, San Bernardino and California the number was double this figure There were more than 100,000 listings in this area. Other top rankers with huge foreclosures dotting the regions are Los Angeles, Atlanta, Chicago, Detroit and Las Vegas. Across US foreclosures rose by 80%

Amongst the cities the highest numbers are in Stockton and Las Vegas. These places had seen stupendous growth in real estate during the preceding years. Detroit is going through a phase of economic slump with high unemployment. Dallas ranked 28^th in rankings based on foreclosures per capita. The numbers take into account all the different stages of foreclosure – default, delinquency, auction and bank repossession. Some are critical about this method as it inflates numbers and does not give a true picture. Another tracking group located 43,000 foreclosure postings in court listings in all the four counties. In Dallas, Collin, Tarrant and Denton counties 19,000 houses were foreclosed.

Despite these discrepancies there is no denying that foreclosures have risen by 10% and continues to do as 2008 rolls ahead.

There are many factors behind the foreclosure crisis – unemployment coupled with medical bills and divorce. But the main accusing finger points to the sub-prime mortgages with floating interest. The other factors were always there but the situation has been triggered off by the sub-prime crisis. Prime loans are given only to those with certain levels of bonafide income. The amount sanctioned also relates to the earnings of the borrower. But this cut off a large section of the populace from taking loans and owning houses. The great American dream is to own a house. To make this possible the sub-prime was introduced. Hardly any down payment was required and there were no income checks. Initially the monthly payments were only for the interest. These teaser terms made many opt for the scheme but when reality dawned and monthly payments doubled and sometimes trebled the borrowers could not pull along. The borrowers began to default, became delinquents and the lenders began to foreclose. One by one like nine pins the houses fell across the country. There were so many that the real estate market reeled with more houses than buyers. A chain reaction on the economy and consequently on the economy has now set in.

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