In 3rd Quarter The Foreclosures Have Risen to 23%

Foreclosures have continued to increase rapidly and it is expected that this scenario will remain even in 2010 mainly due to the aspect of increasing unemployment coupled with the increasing number of loans with adjustable rates that have been reset to higher repayments each month. During the 3rd quarter of this year the number of foreclosure filings were 937,840. This figure shows an increase by almost 23% since the same time period last year as reported by RealtyTrac.

Compared to the second quarter there was a 5% hike at few stages of foreclosures. During this quarter there were at least one out of 136 houses which had to face the process of foreclosure filings and the according to the RealtyTrac reports this quarters figures are the highest in terms of quarterly figures. Rick Sharga in RealtyTrac observed that, "We’d hoped this year would be the peak as far as foreclosures, but we’ve since concluded it will not be. We should see a peak in foreclosures at the end of 2010." There are numerous aspects, which have propelled the situation of foreclosures to this extent. Numerous lenders while dealing with the felonious borrowers avoid the issue of foreclosure. At the end of the moratoriums, the foreclosure woes, will be faced by those borrowers who unfortunately, do not qualify for loan modifications.

A majority number of loans with adjustable-rates are scheduled for resetting and this means that the monthly payments will rise for most homeowners. More borrowers ended up losing their homes as the payments were increased and the rate of unemployment, which was initially 9.8% is supposed to go up to 10% and above. This may lead to a major wave of foreclosures for the second time. Presently, there are 2.8 million home loans, that are active interest-only in nature. These loans have an ‘outstanding principal balance’ of $908 billion. The payments for the interest-only loans is usually low and the duration is for five or seven years. However, with the addition of the principal the payments also tends to increase.

Mark Zandi of Moody’s Economy.com observed that, "Foreclosures should remain really high as long as unemployment is rising, and that is through next spring. They should be very high into spring." Zandi feels that primarily 3.8 million notices were issued to defaulters and out of them at least 2.1 million borrowers might end up being homeless, as they will face the process of foreclosures. They might even fall pray to short sales as well. He supposes that the default notices will decrease in the coming year but somehow the number of foreclosures will increase. For at least 62% of the foreclosures the areas of Nevada, Illinois, California, Florida, Arizona, and Michigan are responsible.

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