Should we be doing more to help our troops fighting for freedom? Sure seems illegal to have this occur for those serving. Some people take a “strategic default” while others lose their homes defending the rights of the “defaulters.”…
Have questions or concerns about this growing problem of military mortgages underwater and being foreclosed upon while serving? Let us hear your comments or feedback about this growing issue.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
Now 27% of homeowners with mortgages owe more than their homes are worth. That’s up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That’s because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow’s chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
The so-called “robo-signing” events of the fall also forced the number of underwater mortgages higher.
When banks’ foreclosure paperwork came under scrutiny, many halted all repossessions until they could straighten things out. With foreclosures no longer being cleaned out of the system, more homes stayed underwater rather than moving on to foreclosure.
The moratoriums have been only temporary, however, and the defaults that had been stopped up in the foreclosure pipeline could come out in a gush over the next few months.
And any bump in the number of foreclosures adds to the likelihood that more homes will be dumped onto an already bloated market. That would just further depress home prices, continuing the vicious cycle that has plagued the industry for several years.
Driven by continued high levels of unemployment across many parts of the country, data from RealtyTrac shows foreclosure activity increased in many cities during last year, despite the fact that many lenders halted their foreclosure process for part of the year.
According to the report, foreclosures increased in 149 of the 206 largest cities in the country, with Houston and Seattle showing the sharpest increase from 2009 to 2010. Las Vegas continued to have the highest foreclosure rate in the country during 2010, even though activity there, along with each of the 10 hardest-hit cities, showed declines compared to 2009.
“Foreclosure floodwaters receded somewhat in 2010 in the nation’s hardest-hit housing markets,” according to James J. Saccacio, chief executive officer of RealtyTrac. “Even so, foreclosure levels remained five to 10 times higher than historic norms in most of those hard-hit markets.”
Nationwide last year, more than 2.8 million properties received foreclosure filings, accounting for roughly 2.2 percent of all homes.
However, the number of foreclosed properties may also provide opportunities for many buyers. According to the National Association of Realtors, distressed homes made up 36 percent of all existing-home sales in December.