Fresh Deluge of Foreclosures Expected In the Coming Months

The Realty Estate builders in the US anticipate a fresh deluge of foreclosures in the coming months of 2008 to inundate the already flattened housing market. The President and CEO of Foreclosure.com Brad Geisen, based on database information believe that the worst of the foreclosure crisis is over and market watchers can expect an upward trend in the housing sector. In fact the figures in foreclosure activities noted in the last few weeks could spell a turnaround for house builders and estate developers throughout the nation.

Geisen’s optimism is reasoned with the view that the whole foreclosure scenario has been over hyped due to incorrect data processing. Organizations tracking foreclosure market activities are unable to pinpoint properties under multiple mortgage lien which find their way into the data innumerable times giving erroneous and misleading results. Since the distinction between pre-foreclosure properties and houses that have been already foreclosed upon had not been clearly marked, it has added worries to woes in arriving at any correct figures on foreclosure market trends.

Pre-closure properties indicate that a default on loan notice has been served and is awaiting trustee or sheriff sale. Contrarily, a reo property is one that has borne the entire process of foreclosure before being owned by the bank. The Mortgage Bankers Association had released information stating that approximately 2% of total loans are in the process of foreclosure which again proves that banks are crying hoarse over foreclosure problems that are not strictly true.Geisen stated that banks assumed a flat 2% default rate while some took it to 5% as a reserve default rate. Moreover, securities that were backed by mortgages had failed and were being sold off to foreign investors, pushing the foreclosure crisis to the brink, he asserted.

Even Geisen could not draw a silver lining because the national figure on foreclosed house inventory had risen by 30.49% since February last. The leading markets on foreclosed properties of Florida and California could not disburse the properties as fast as they were coming into the market, which had boosted the statewide figures in inventories. A proper scrutiny of the figures shows a downward curve in the number of new reo houses recording the national figure at 3.8% lower than a year ago. The southern and the mid-west states claim to have stalled the foreclosure rates showing a considerable decrease of 18.97% and 15.11% respectively in the number of newly foreclosed houses.