Foreclosure Statistics USA
Posted on October 20, 2008
Filed Under Foreclosures |
Foreclosure is a legal procedure that means a forced sale of a property in order to repay creditors. Each individual must know it and the details of the foreclosure procedure implementation because nowadays in the USA most of the people can face it, whether they like it or not. That is why a foreclosure reform is necessary. The objective of the foreclosures reform is to ensure a better balance between the rights of the debtor and the interests of its creditors but also to develop consensus solutions (selling out of court, distribution of the sale price between creditors). According to statistics, the number of foreclosed properties has increased with 65% in April 2008 in the United States, compared to the same month last year.
This is obviously a new record, according to figures released in May 14 by Realty Trac, which keeps statistics on this market. In their various forms, foreclosures increased by 4% compared to March to 243,353 operations. The national ratio is now related to 519 U.S. households, according to estimations done by Realty Trac, cited by news agencies. This rate could reach 2% by the end of the year.
In Nevada, in April there were recorded 146 foreclosures. The other American states, which are the most affected, are California, Florida, and Arizona, where people’s wish to live in a sunny area has been accompanied by a frantic real estate speculation. In 2007, there were half a million foreclosures. This is not surprising, as the current property crisis is the worst since the Great Depression of the thirties.
The mortgage “subprime,” granted since 2005 to borrowers, whose credit is bad, often predicts a sharp rise in monthly repayment after a “grace period” of about two years. On the other hand, the fall in properties prices, the number of foreclosures will further increase by giving hundreds of thousands of homes on the market, 10 to 15 million (one is not very safe and it is changing fast) to support a U.S. household debt exceeds the value of their property. The temptation not to repay or to hand the keys to the bank is very strong, especially as American law encourages it. The average price of houses has dropped by 7.7% in January, February, and March 2008. It is the toughest crisis since the thirties.
In early May, the chairperson of the Federal Reserve of the United States, Ben Bernanke, had launched an urgent appeal to Congress asking officials to take the necessary legislative measures to stop the infernal foreclosure crisis. He warned that the massive foreclosures could have significant impact on the housing market, financial markets, and the economy in general. Nevertheless, the Democrats that dominate the houses of the Congress do not have time to delight the White House and they threaten with a veto.
Most of the people can find these statistics merely distressing. While economists, intellectuals, or the central bankers like Ben Bernanke, have not ceased to ask the banks to find solutions before reaching foreclosure, figures related to foreclosure are steadily increasing. The number of foreclosures has increased by 48% in one year!
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[...] a study conducted by Global Insight, approximately 1.4 million houses in the USA will face foreclosure the next year, according to USA today. The value of properties can decrease with 1,200 billion [...]