Increasing Number of Foreclosures in the Second Quarter

By the second quarter of this year, the number of foreclosed homes increased to approximately 17% despite the implementation of the federal program to help the borrowers to protect their homes from foreclosure. The figure of foreclosures rose to 711 in the Monterey County during the second quarter of this year. While during the first quarter of this year, the records featured 680 foreclosures in this county. This is almost 4.6% hike according to Marina J. Camacho, who is the administrative services coordinator of the county.

Though the local figures are quite high, overall there have been fewer foreclosures this year compared to the same time in the previous year. During the second quarter of 2008, there were 754 foreclosures in Monterey County. This indicates more foreclosures in 2008 compared to 2009.

The national figures feature for foreclosures shows 106,007 within the second quarter as compared to the figure of 90,696 within the previous 3 months as per the reports of the Office of Thrift Supervision. According to the quarterly report, the mortgage figure has reached to 64%, which is an exceptional hike. This hike is consequent to the moratoriums imposed on the government foreclosures.

During this period attempts to help borrowers retain their homes also rose through the programs like Making Home Affordable. According to this plan the lenders received some payments in order to reduce the debts of the homeowners. As per the government data since the initiation of this program there were at least 400,000 borrowers who received help. The intention of the Obama government is to help at least 500,000 borrowers within November.

Moreover, the increasing trend of joblessness not only hindered the efforts to control foreclosures but also stepped up the occurrences of foreclosures. In the meantime, the figure of failure borrowers increased grossly and most of them had missed out on approximately two payments. This led to increment of foreclosures by at least 10%. According to the mortgage data, “continued to reflect negative trends influenced by weakness in economic conditions including high unemployment and declining home prices in weak housing markets.”

The report also reflected the threat posed by the numerous loans that are risky and one of the options being adjustable-rate mortgages. In most cases though, the borrowers take loans as per the low interest rates but in the process the payments increased gradually, inflicting the risk of home loses on the borrowers. Above 15% of such loans led to delinquencies during the second quarter of this year. The report also stated that, “The risks of these loans and geographic concentration caused them to perform significantly worse than the overall portfolio.”

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