October 2008 shows that foreclosures are on the rise, approximately 25% nationally compared to last year at this exact time. Lenders began foreclosure proceeding on more than 279,000 in this past month alone. Along with that, 84,000 properties were reported repossessed this past October.
The big questions being: are things going to turn around, when is the economy going to improve and are there laws being put in place to help homeowners. These are all valid yet difficult questions to answer. Right now a combination of strict lending standards, decrease in home values and the poor economy are hindering any improvements for homeowners.
Last month you may remember hearing on the news, the downward spiral of the financial market, forced the government to pass a $700 billion rescue package. The plan was to buy bad assets from the lenders; experts predicted them to have acquired more than a third of all U.S. properties for sale. Last Wednesday it was announced by Treasury Secretary Henry Paulson that the “plan” would not purchase those troubled assets. He said it would take too much time; instead the Treasury will be buying stakes in banks and encouraging them to resume more normal lending.
Housing and Urban Development Secretary Steve Preston also announced on Wednesday that the government could possible let borrowers qualify for a $300 billion program designed to let troubled homeowners swap there risky loans for more affordable ones. The only down fall in this though, is if lenders decide not to participate because of having to reduce the value of a loan and therefore taking a loss. Hopefully this does not happen and the help will decrease foreclosures.
Putting it into prospective- Number of homes that received a foreclosure filing for the month of October 2008:
• Nevada- 1 in every 74
• Arizona- 1 in every 149
• Florida- 1 in every 157
These three states main metro cities hold many of the top ten spots for highest foreclosures filings the month of October 2008:
1. Las Vegas, NV
2. Fort Myers, FL
3. Miami, FL
4. Stockton, CA
5. Merced, CA
6. Phoenix, AZ
7. Riverside/ San Bernardino, CA
8. Ft Lauderdale, FL
9. Modesto, CA
10. Orlando, FL
Now for some good news! Overall, California was down by 18 percent from the previous months. This could be due to some of the new laws delaying the foreclosure process. For example in California lenders have to contact borrowers 30 days before filing a default notices. Other states are now trying to incorporate this law; North Carolina has decided to give borrowers an extra 45 days. Only time will tell if this, along with if the government “bail out plan” will help people avoid foreclosure or just delay the process.
If you are a homeowner and facing foreclosure what is your opinion; can the governments bailout plan succeed? If you were given extra pre foreclosure time, will it help you avoid foreclosure? As a homeowner, what do you think would help your situation the most?