Foreclosures are finally dropping
The number of homes lost to foreclosure is closing in on levels not seen since before the housing meltdown. CNN Money recently indicated that Foreclosure filings — including notices of default, scheduled auctions and bank repossessions — during the first quarter fell 23% from a year earlier, the lowest level since the second quarter of 2007.
Last month, banks repossessed just over 43,000 homes. In September 2010, repossessions topped 100,000 a month. For the past couple of years, foreclosures have been on the decline as homeowners seek alternatives like short sales, in which they sell their home for less than what they owe and the bank agrees to forgive the difference. The deals are preferred by the banks over foreclosures and have less of a negative impact on a consumer’s credit score. But now even the need to turn to short sales is waning.
Government initiatives, like the Home Affordable Modification Program and Home Affordable Refinance Program, have helped millions of borrowers avoid foreclosure. And last spring, under a $25 billion settlement deal with state and federal officials, the nation’s largest mortgage lenders agreed to help struggling borrowers by lowering their mortgage rates, reducing their principal and other fixes. Here at 360 Group, we’ve seen little in the way expedited actions. Instead we have seen an increase in the Change of Servicers, which enables the banks to stall for more time before ruling on a modification. Often they change servicer’s to get people to just give up because the entire process of modification or short sale has to start all over with the new servicer.
A larger percentage of the nation’s foreclosure activity is occurring in areas suffering from severe economic problems, such as “Rust Belt” cities like Rockford, Ill. and Chicago, not in the recently-developed, mid-to-upper class neighborhoods of California. Further, many of the people who lose their homes now are dealing with a layoff or personal issue, such as a divorce, illness or death in the family. These people with legitimate hardships are the ones that should be helped.
There are some states that are still struggling with a backlog of foreclosures like Florida, Illinois and Georgia, all states where courts oversee the foreclosure process. Florida had more than twice as many bank repossessions as any other state in March — nearly 7,600. Illinois, with more than 3,500, was second and Georgia, with 3,350, was third.
While the foreclosures and short sales appear to be in decline there are still many people who need help. It’s important for those who are in distress to speak to someone before it’s too late.