Housing Crisis Continues to be Plagued with Foreclosures
The housing crisis continues to be plagued with foreclosures – each 13 seconds a house is being foreclosed upon. This cycle of the crisis is threatening any hope of recovery as property values continue to take a beating worth billions of dollars.
Each day over 6,600 foreclosures are posted as per the findings of Center for Responsible Lending. The latter is a non-partisan body keeping a hawk’s eye on developments. It is based in North Carolina. Already the number of foreclosed houses has touched 2 million this year without showing any signs of slowing down in pace.
It is USA’s worst housing collapse since records have started to be kept in the late 19th century. It seems that things are getting worse with foreclosure now reaching out beyond the sub-prime mortgages to other types. To add to the chaos unemployment has been increasing at a staggering rate.
Michael Barr of the Treasury testifying before the Congress in September said that over 6 million families would be scarred with foreclosure during the forthcoming three years. He said, “The recent crisis in the housing sector has devastated families and communities across the country and is at the center of our financial crisis and economic downturn.”
In September a foreclosure task force set up by the Supreme Court of Florida noted that there was a change in the main cause of foreclosures. It read, “People are no longer defaulting simply because of a change in the payment structure of their loan. They are defaulting because of lost jobs or reduced hours or pay.”
Florida has been and continues to be one of the worst foreclosure hit states. It has the highest foreclosure rate in the nation during the second quarter. 23% of the houses are in some stage of foreclosure. The report noted that “the latest news for Florida is horrifying.”
Some have read an improvement in the situation because of sales picking up and property value increasing in some areas. Perhaps the crisis has reached its nadir but there is no denying that this is the worst fall in prices since 1890. Half of the recent deals have been short sales where the houses have been sold at absurdly low prices. It is ironical that even though the country is getting back on rails from a long depression the housing crisis continues apace.
According to The Center for Responsible Lending the foreclosures are going to erase $502 billion worth of property value in this current year.
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