Per the New York Times this past week, the third phase of foreclosures is due to his the market soon. As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.
In the latest phase of the nation's real estate disaster, the locus of trouble has shifted from subprime loans - those extended to home buyers with troubled credit - to the far more numerous prime loans issued to those with decent financial histories.
Our in house REO team has just this past week, received a large number of new Foreclosure listings, after a noticeable lull in activity. Despite efforts for homeowners to save their homes, with many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate
Foreclosure rates have been growing fastest in states with particularly high unemployment such as California: the unemployment rate rose to 11.2 percent from 6.4 percent for the year that ended in March, while the foreclosure rate for prime mortgages nearly tripled, reaching 1.81 percent.
I feel confident that we're prepared to withstand this new Tsunami; banks are much better at processing REO offers and transactions, interest rates are still low, REO listing agents have gotten better, and our sales team has the experience necessary to educate our buyers on what is involved with a foreclosure transaction. So unlike the first two waves, I feel confident we'll be able to weather the storm!
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