Arizona foreclosures are expected to be contained further with the allocation of $125 million to help financially troubled homeowners in the state.
In May, foreclosure postings in Arizona surged slightly compared to April, after slowing down substantially in the previous month. Over the year, however, foreclosures slowed down by nearly five percent.
There were more than 16,000 homes that received default and foreclosure notices in May, and more than 6,000 of these were reacquired by lenders. A number of these are expected to be released immediately by lenders to the market as residential homes for sale, with the rest rationed out in order not to overwhelm the market and push down prices.
Based on reports from the Arizona Housing Finance Authority, the money would be spent to help homeowners achieve permanent mortgage modification and to help qualified unemployed and underemployed homeowners pay their monthly amortizations while they are looking for work.
Although the pace of Arizona foreclosures has been slowing down compared to last year, defaults and repossessions continue because of job losses and the effects of fraudulent mortgages. The unemployment rate in the state has climbed up in May to 9.6 percent, up from the April rate of 9.5 percent and the May 2009 rate of 9.2 percent.
The statewide jobless rate rose despite the net addition of 3,400 jobs in May. With commercial foreclosures signifying the difficulties of business enterprises, there are not many who are able to create and offer new jobs to the unemployed.
Foreclosures sales have also affected the jobs of people in the construction industry, as home builders cannot retain workers because they cannot sell new homes at profitable prices.
A number of foreclosed homes are also the result of fraudulent short sale and loan modification schemes offered to homeowners. The 38 loan officers and mortgage brokers indicted in June showed the prevalence of mortgage fraud in the state, contributing to the increased number of Arizona foreclosures.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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