Job Losses Aggravating the Crisis of Foreclosures (Part I)

Presently the filings of foreclosures in the U.S. have crossed approximately 300,000 for the 6th month at a stretch. This is primarily the result of the increasing rate of unemployment that has prevented the homeowners from paying their debts. The number of properties receiving an auction notice figured to at least 358,471.

Compared to last year’s records this is almost 18% higher. There were at least one out of 357 properties which received a foreclosure filing. Compared to last year the foreclosures increased as more companies cut down on 216,000 workers in the previous month. This added to the rate of unemployment by 9.7% as observed by the Labor Department. According to Morris A. Davis, who is an assistant real-estate professor at the Wisconsin School of Business, this unemployment scenario has superseded the efforts of the government or the banks to control foreclosures. Davis observed, “The foreclosure numbers are largely unemployment related.

As long as 15 million Americans are unemployed, record foreclosures will continue.” Though the contracts for buying homes that were previously owned increased more than it was expected in July and it kept on rising for at least 6th month in a row. According to Freddie Mac, the mortgage buyer the median price increased to 1.7% during the second quarter. in August Nevada faced the maximum number of foreclosures as each of the 62 homes got a filing. In August the foreclosure filings increased by 53% compared to last year records featuring 17,902 properties in Nevada that got a filing for foreclosures.

Florida recorded the second-highest rate of foreclosure in August as one out of every 140 homes got a filing. California followed the path with every one out of 144 homes facing foreclosure filings. A 9.6% fall in the number of filings helped in lowering the rate of foreclosures in Arizona. One out of every 150 households in Arizona faced a filing for foreclosures in the last month.

There has been 360,165 modifications by 47 banks under the Making Home Affordable program of the U.S. government. In the plan of foreclosure-prevention the worst performing banks are Bank of America Corp. and Wells Fargo & Co. Even they had to step up their mortgage modification speed by approximately 60%. The number of modifications by the Bank of America was almost doubled by 59,891 in August and the rate of modifications by Wells Fargo rose to 33,172 which figured to 64%. Though it is expected that the revamping of loans might control the foreclosures from rising to some extent but unemployment has made things difficult.

Popularity: 5% [?]