Foreclosure rates in the country continue its double-digit rise as compared to statistics from the previous year. One out of 452 homes in the U.S. received a foreclosures notice last October, which is up 25 percent compared to last year.
Foreclosure filings, which include notices on defaults or sales, reached 279,561 in October which is 5 percent higher than September from the previous month. This includes repossessions of homes by banks and financial institutions.
Opposite in direction to the national figures, California rates fell by 31.6 percent in September, compared to the previous month. This downward trend continued in October by 18 percent lower than September. This slowdown in the foreclosure rates was a direct result of a new law in California which was promulgated starting September this year.
The law requires banks and lenders to discuss new terms and options to delinquent homeowners in a bid to avert foreclosures. All means should be exhausted before any notices are sent through.
The slowdown in foreclosure rates in California actually helped to put the national figures down last September. However, the increase in foreclosure activity in other states and counties caused the trend to go back up, despite the downward trend of foreclosed properties in California.
Nevada posted the highest rate in October with foreclosures for one out of every house. This is followed by Arizona which increased 35 percent from September and 176 percent from October of last year.
The previous housing boom, which resulted from subprime lending even to high-risk borrowers, resulted in a wave of foreclosures across the nation. This was due to homeowner' failure to pay for mortgages after changes in interest rates, a feature inclusive of their subprime loans. This is compounded with the nationwide downtrend of home prices which put homeowners underwater, with their home values lower than what they owe in their mortgages.
The new law in California may help put figures down, but experts say it is not enough to help homeowners already at the end of the rope for foreclosure. Many considered it as just delaying a disaster which is more likely to come than prevented.
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