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Indications are that one million American homes may be foreclosed this year

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By : John Smith    99 or more times read
Latest indications are that the number of repo houses entering the American foreclosure market could reach the one million mark during 2010. According to real estate analysts, this sudden surge is the result of bank’s unexpectedly more enthusiastic and more efficient approach towards closing out on troubled mortgages.

Or are lenders simply fidgeting out the festering gap while they continue their stand-off with Washington and its Treasury Department? And what’s to become of once happy families who lived in the one million houses?

The number of residential properties foreclosed by banks during the first quarter of 2010 was up 30% compared to last year. During the same period pre-foreclosures also rose – this time by 15% and 7% over 2009. According to market analysts the number of homes scheduled for auction during the first three months of this year was the highest since 2005.

Last year lenders backed off a bit following federal pressure to work out loan modification contracts with their clients instead of foreclosing. A number of States reinforced these efforts by outlawing foreclosures for a while. The banks were also ill-prepared for the flood of new delinquents protected by increasingly complex rules.

Although relatively successful during 2009, the impetus of HAMP seems to be wearing thin – the banks are back in town and foreclosure’s the name of their game.

Analysts expect the trend to continue unabated for the rest of 2010, meaning that one out of every 138 American home-owning families may expect the sheriff’s unfriendly knock this year. Many additional troubled households will join the foreclosure queue as well – reasons will range from plain delinquency though higher interest rates to illness or unexpected unemployment. Most of these families will be underwater, and with failed re-mortgage applications in their pockets.

It now seems likely that Obama’s foreclosure efforts, including the $75 billion spent on them have only chopped a tiny tip off the huge foreclosure iceberg that’s drifting uncontrollable in the bay. Just 200,000 American households have completed loan modifications under the federal program (or a relatively tiny 21% of troubled borrowers). A further 150,000 failed to complete their applications after signing up, either because they failed to make their payments, or because they did not know enough about the process. Surely an official someplace, somewhere could have stooped to tell them how?

The banks are set to tighten screws and extract their pounds of flesh this year. Of the States expected to contribute significantly to their trophy of one million homes, Arizona, California, Florida and Nevada will feature highly.
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