Rise In Foreclosures Causing Turmoil in Real Estate Industry

October 24th, 2007

We all know that the real estate industry has been going through a bad patch for sometime now. The Foreclosure Listing Service has come out with an information bombshell, yes, believe it or not, North Texas homes that are bound to be auctioned as part of the foreclosures process is going to be the highest since the year 1989! The auction process would kick start next month but these figures are just too frightening!

To reiterate for your understanding, it is important to understand the legal meaning of foreclosures. When a bank or lender is unable to recover payment on a pending loan that wasn’t paid on time by the homeowner, a legal process that allows a bank or a lender to sell or acquire the possession of that particular piece of property is known as foreclosures.

The foreclosures for next month in the real estate segment indicate postings that total 4,303 for the five-county area. This means there has been an increase by 7 percent vis-à-vis the same time last year. Figures for the previous year indicate that 4,009 postings had been listed. The same year to date, the postings for the foreclosures rose up 10 percent to a figure of 38,880 for the region, despite excluding Rockwall County. In Dallas County, the figures rose up 8 percent to a figure of 18,326.

It is definitely too complex to clarify this month’s postings. This is due to the fact that no substantial or material change took place in the context of the prevailing economic conditions. In fact, the trend of increase in foreclosure postings had shown declines during the months of both September and October.

The lenders had been holding off the processes for foreclosures simply on the assumption that aid was on its way. At some point of time, the lenders had changed their stance, dropped the waiting façade and brought out their viewpoint that they simply couldn’t carry on with this situation of indefinite waiting.

But it doesn’t really happen that all homes that are posted for foreclosures get sold at an auction in the real estate. Sometimes, there is a delay in the sales or a delay because the borrower decides to go ahead and negotiate a new agreement with the lender.

The disintegration that has erupted in the real estate segment and mortgage markets, along with the spiraling trend in foreclosures has effectively affected most buyers. But economists do point out that sales in retail have improved and settling of financial markets would definitely help to soften the turmoil that has been brewing for long in the real estate segment.