Initial
phases of US foreclosures have increased by six percent in the second
quarter when compared to statistics from the previous year. Ever
since the housing bust of 2006, the bank repossessed millions of
homes because property owners were no longer able to afford their
mortgage payments. This is the product of the whole sub-prime mess
when people with little or no ability to maintain a mortgage were
immediately granted home loans.
Boon
or Bane for the Market
It
depends on what your views are regarding the entire foreclosure
process. Of course, during the preliminary phase, the sight of
foreclosed signs in US neighborhoods signified that the economy was
in a state of depression. It did not help very much that when
compared with the Great Depression of 1929, more people today were in
worse conditions than they were back then. On the other hand,
clearing the back log of available properties is helpful for the
housing market on the long term because it can act as a catalyst to
speed up the recovery of the US real estate market.
The
first phase of the foreclosure process increased by 6% compared from
last year. This is the first time since 2009 that an increase of
this nature was noted. This can be explained by the fact that most
banks during that period found alternative means to dispose of the
properties before the final phase of home seizures commenced. These
methods included partnering up with the affected homeowner for a
short sale wherein properties were sold off for less than what was
left on their mortgage.
Current
Market Conditions
Based
on available data, the US real estate market is now able to withstand
some of the pressures that come from weak economic indicators. The
only factor that has been restraining the market rebound is the aptly
named shadow inventory of properties that have mortgages which are 90
days overdue. While foreclosures that stopped in 2010 due to abuse
by banks in the robosigning scandal of falsified paperwork, the
settlement amounting to $25 billion is helping provide a boost for
the market to move in the right direction.
For
more info on how you can profit from investing in the US real estate
market
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