Foreclosure filings were down in over 50% of America’s worst foreclosure black-spots in the first quarter of 2010. But does this mean that the situation is on the mend?
According to some analysts, the improvement is a statistical aberration, as opposed to actual good news. There are two reasons for this opinion. In the first instance, this doesn’t mean anything in itself unless the trend continues. In the second, the effect was not reproduced elsewhere in the States, where the trend was 16% the other way.
In reality, the reduced foreclosure action in these high profile hot spots is more likely a reflection from the magnifying glass that Washington is holding on those parts of the country – the pressure is on the banks to tow the line on HAMP initiatives that encourage mortgage quantum modifications and forgiveness after approved short-sales.
Whether this pressure has simply temporarily slowed down the foreclosure train, or produced long term results is not yet clear, nor will it be for months to come.
Obama’s current plans to send the foreclosure wave back out to sea again depend heavily on achieving more short sales – these are sales where banks permit underwater borrowers (whose balances exceed current market value) to sell for market value, and agree to pick up the tab on the outstanding balance themselves. While the politicians and treasury moguls who suggested this approach may be slapping each other on their backs already, the truth is actually that the banks are doing what they’re told to do only because, and where it is, cheaper for them than doing a foreclosure. How does this work? Quite simply, the lenders save on legal fees, taxes, broker’s commissions and maintenance costs, and besides, private short sales often yield higher takings than auction rooms.
The hardest hit top 20 areas for metro foreclosures continue to bulls-eye around Californian cities, although the worst score still belongs to Las Vegas where filings went up in the first quarter of 2010 (but are still down year on year). The Sin City chalked up 1 in 28 foreclosed units this year – that’s 5 times the national average. Next on the rankings comes Modesto, California which rings in at 1 in 34, just pipping Cape Coral, Florida, Riverside, California and Stockton, California to the post.
Los Angeles, America’s second biggest metro posted 59,293 filings in the period January to March 2010, more than any other big-city area, but still only the 32nd worst with a rate of 1 in 75.
With serious numbers like these, it’s doubly hard to believe that the tide has turned.
Notice: In accordance with FTC guidelines, we state that RealEstateProArticles.com has financial relationships with some companies and may be compensated if consumers choose to buy, subscribe or take any action to a product or service via the links on our website. Occasionally, we receive free access to review a product or service. We do not accept compensation in exchange for a positive review. These reviews are strictly the opinions of the author.
![[Valid RSS feed]](http://www.realestateproarticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites