Although real estate experts expected the foreclosures rate to soar for the first half of the year, they were not prepared for the number of foreclosure filings recorded. An 86 percent increase was observed overall compared to last 2006. States that were hit hard were the same ones who have been leading the list of highest foreclosures rate for the past six months. They include the states of Nevada, Colorado, California and Michigan, all of which have thousands of foreclosure homes for sale in the market.
The growing number of real estate foreclosures was attributed to the many subprime loans defaulting. After more than a year, the subprime industry has yet to recover from mistakes made during the most recent housing boom where many owners with poor credit took out loans that they could not afford even if they had good credit records. How could they? The aggressive lenders encouraged most of the borrowers to take out adjustable rate mortgages even when they knew that monthly payments will balloon by as much as 40 percent once the interest rates re-set.
Although the nation’s foreclosures rate dipped by almost 7 percent for the month of June, experts are worried that the worst is yet to come. Hopefully, the national economy, which has shown to be unaffected by the high foreclosures rate, will continue to be positive. At the end of the day, experts are confident that the housing condition will correct itself especially with the great buyer interest generated by these distressed properties. Rather than purchase brand new homes, many still opt to buy one of these forclosure homes because of their low prices. Many first time buyers even enlist the help of foreclosure brokers like E-Foreclosure Search in order to enjoy convenience as well as great deals.
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