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Number of Bank Foreclosures Likely to Decline in 2011

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By : Clark Raitz    99 or more times read
The coming 2011 is likely to produce fewer bank foreclosures compared with the current year as housing industry experts predict a drop in mortgage loan delinquency rates all over the U.S. According to credit bureau reports, delinquency rates by the end of next year will be around 5%. This is lower than the projected rate of 6.2% for the full current year.

Locally, this will mean fewer Los Angeles foreclosures and fewer distressed properties for the rest of California. The best part though, analysts have asserted, is that it will give the state and the whole country a chance to mount a sustained residential market recovery, which in turn will contribute to a stronger economy.

The projected loan delinquency rate for next year is seen as very good news, despite the fact that it is still way below the ideal delinquency range of 1.5-2%. However, analysts stated that any improvement in the housing market, no matter how small, is positive news given the current condition of the industry.

Mortgage delinquency rates peaked in the 2009 fourth quarter, producing a rate of 6.89% which led to increased supplies of bank foreclosures all over the country. The current year’s fourth quarter has a projected rate of 6.21%, while next year’s last quarter is projected to record a loan delinquency rate of 4.98%. According to housing market observers, delinquency rates peaked in last year’s fourth quarter mainly because of the tighter standards imposed by lenders on underwriting activities.

A number of other factors have been cited by experts that contribute to loan delinquencies. One of them is unemployment. The higher the unemployment rate, the higher the mortgage loan delinquency rate. Declining values of houses are also contributing factors when it comes to escalating delinquency rates.

Most analysts agree that the home mortgage industry of the U.S. is still in an undesirable position, but improvements are starting to manifest, although in small and slow steps. Analysts are confident though, that the recovery will start next year and will continue on in the coming few years. They also stated that any decline in delinquency will result in fewer bank foreclosures as well as Los Angeles foreclosures, so it can be very beneficial to the housing market in general.
Original Post: on, your source of foreclosed homes.

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