New Home Foreclosures Top 2009

Despite the foreclosure madness of 2008 and 2009, it is expected that there will be more than 1 million foreclosures among American homeowners this year. More than half a million homes were already foreclosed upon by mortgage lenders in just the first half of the year.

In a more “normal” economy, there are about 100,000 foreclosures each year. This year’s numbers do not even include pre-foreclosures, and the steps to foreclosure have already begun on thousands and thousands of additional homes.

While there are stronger homeowner rights on a foreclosure, the continuing sluggishness of the economy has put more and more borrowers in a precarious position. For many who were just holding on month to month, they are just a single lost paycheck away from losing their home.

These numbers are for loans where the lender has begun foreclosing, and repossession is imminent. Separate and aside are the millions of homeowners who are “underwater” with their mortgage, meaning they currently on their house than it is now worth.

Since it can take 12 to 15 months for a property to be foreclosed on and sold, and the process can begin when the property owner is 30 days late on payment, many of these newer foreclosures have been in process since before this year. In addition, because of the lead time, it’s hard to say with certainty where the numbers will end up by years end.

If the economy dips or worsens, taking an additional downturn, the numbers could soar higher. Even providing that economy remains relatively stable in the state it’s currently in, it will be years before the inventory of discounted foreclosed homes gets absorbed.

Even for homeowners who had good credit scores but who took out conventional, fixed-rate loans, they have now become the fastest growing group of foreclosures. According to Lender Processing Services, Inc., there are almost 7.5 million home loans that are already in some stage of delinquency  today.

If the economy does pick up, it will take quite some time still for the effects to ripple down. In addition to homeowners, home builders and all their related tradesmen and industries will continue to feel the pinch.

This entry was posted on Thursday, July 15th, 2010 at 8:25 pm and is filed under Foreclosures and Pre-Foreclosures, Homeowner Rights on a Foreclosure, home loan foreclosure, steps of foreclosure. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.