| Experts Predict Elevated Levels of Foreclosures for | | | | - which means they owe a great deal more to the |
| Next Three Years | | | | bank that their property is currently worth. Even though |
| Just when everyone thought the level of mortgage | | | | many banks and lenders are beginning to offer loan |
| defaults couldn't get any worse, it did in the second | | | | modification programs, many homeowners can't even |
| quarter of 2009. It's now clear the REO properties will | | | | afford lower payments because they've lost their jobs. |
| continue to be a major factor in real estate listings for | | | | This year, one and a half million homeowners are |
| at least the next three years. Rising unemployment is | | | | facing foreclosure. And those numbers are expected |
| now predicted to be the major factor rather than the | | | | to go up, not down - because many of the homes |
| shaky sub-prime mortgages which helped create our | | | | currently in foreclosure still haven't hit the market as |
| current economic crisis. | | | | official REO listings. Paul Puryear and Buck Horne of |
| Now, as predicted, homeowners who had solid | | | | the financial services company Raymond James state |
| mortgages based on their good credit history are | | | | that, "Out of more than 4 million homes currently |
| having trouble making payments, due to more job | | | | owned by lenders, actively in foreclosure, or seriously |
| losses as well as cuts in the hours of employees who | | | | delinquent, roughly 1 million are captured in the NAR's |
| are keeping their jobs. Mortgage defaults are running | | | | (National Association of Realtors) inventory data and |
| at their highest levels since the Great Depression, with | | | | listed as 'distressed inventory' in MLS." |
| 4 percent of homeowners with a mortgage in | | | | New home construction is certainly no better off. The |
| foreclosure and another 8 percent who are at least a | | | | National Association of Home Builders released their |
| month behind on their payments. | | | | new report - and each aspect of their housing market |
| The last time the housing market hit this big a low was | | | | index continues to track well below the worst levels |
| in the early 80's. During that recession, as is traditionally | | | | ever seen in the over 20 years of the report's |
| the case, it was a rebound in the housing market that | | | | existence - in others, it is firmly in uncharted territory. |
| helped the economy out of its tailspin. But leading | | | | All this suggests that the number of REO properties |
| authorities like Wells Fargo Securities senior economist | | | | will hit even more historic highs in the months to come. |
| Mark Vitner says this recession is different and doesn't | | | | More foreclosures than all the experts predicted will |
| see that kind of real estate recovery on the horizon. | | | | occur and the banks and lenders will have to find new |
| As a matter of fact, he's predicting this trend will | | | | and innovative ways to more efficiently get those |
| continue for at least 3 more years. | | | | properties "market-ready" and listed with REO agents |
| Currently, refinancing is not an option for many troubled | | | | to avoid an incredible glut. |
| homeowners, because home values have fallen so far | | | | |