Increase in Foreclosures

New Results are in!

The monthly foreclosure rates are in for the month of May, and they reflect the anticipated rising foreclosure rates. Compared to May of last year, foreclosures jumped an astonishing 90%.  This reflects the poor spring housing market, and foreshadows the continuing decline of the market throughout the rest of 2007. The foreclosure rate jumped 19% between April and May of this year, and the number of foreclosure filings are the largest since a real estate data firm, RealtyTrac, started recording the numbers in January of 2005. Such high foreclosure rates in the middle of the spring/summer buying market shows that the real estate market is not looking to improve throughout the next year, researchers believe. While not every city, community, or neighborhood is seeing this rate of foreclosures, the overall rate is much higher than usual. They are becoming more common, and leading to decreasing home prices throughout the nation. According to RealtyTrac, the data firm that records the foreclosure statistics, there was 1 foreclosure for every 656 households in the United States during the month of May. The rate of homeowners who have subprime loans foreclosing have jumped this year alone. Subprime lenders offer loans to those with poor credit, and often the borrowers are unable to make their payments. Because of the amount of foreclosures, and homeowners defaulting on their loans, over 2 dozen subprime loan companies have gone under this year alone. Many are watching the market carefully because they are worried that the issues with subprime lending could have an effect on other mortgage companies, and possibly even damage the overall economy.

Nevada, which had at one point one of the hottest real estate markets, led the country in its foreclosure rates, with 1 foreclosure for every 166 household. This was the 5^th month in a row that the state led the foreclosure market, and the number of foreclosures in May jumped 40% from April….nearly 5 times the national average. Colorado was second in the nation for foreclosures in May, with 1 foreclosure filing for every 290 households. Their foreclosure rate rose 9% in May from April. California, which came in 3^rd in May had a foreclosure rate of 1 foreclosure filing for every 350 households.