In 2010, some 2.7 million households received foreclosure notices.
Over 1 million homes were repossessed by banks in the same year.
By the end of 2010, over 3 million homes were repossessed.
The total number of foreclosures is estimated to be 6 million before the crisis abates.
At this time, over 5 million borrowers are at least 2 months behind in their mortgage payments.
Foreclosure statistics do not include the millions of borrowers that are seriously behind in their mortgage payments.
Unemployment and the property crisis have ballooned into a problem that has encompassed financial institutions, banks, the entire middle class, and a large percentage of the other classes. Unemployment was caused by the financial meltdown, which in turn was caused by the property prices crash and now the entire financial crisis is a debacle of epic proportions.
Foreclosures instituted by the financial institutions to protect their interest did not really do so as the property prices were a small fraction of the outstanding debt in which they were the sole collateral security.
Foreclosures, therefore, were akin to “trigger-happiness” on the part of the banks. While there is no substitute for a foreclosure proceeding, and really no legal option for the lender to recover its debt, the term “foreclosure” has become an anathema to an entire generation.
The governments are scrambling to save people’s homes, in direct conflict with the interest of beleaguered banks and other lenders, resulting in a national crisis and huge bail-outs. This crisis has had a tsunami-like effect on the entire world’s economy with higher rates of foreclosures in the entire industrialized world including almost all of Europe, Japan, Australia, and South Korea, among others.
“Foreclosure” has essentially become the new “f” word. The borrowers are made to look bad (socially) because of their inability to pay the mortgage, while the lenders are made to look bad as the Goliath of this epic saga.
What is little known though is that a massive percentage of homeowners let their homes go into foreclosures as the property value had dropped by 50, 60, and even 70%. They simply bought the house back at the foreclosure auction for pennies on the dollar.
For example, let us assume that a home has a current mortgage of $500,000 on it. On average, this property would have dropped to a value of $250,000. Instead of paying $500,000 over the balance of the term, the owner let it go into foreclosure and then bought the same property back at auction at a price that could conceivably be even less than the $250,000 (due to the “auction value” syndrome).
Including interest over a 20-year term, the owner could have saved himself over $600,000, which equates to $30,000 per year.
Foreclosure is being termed as the economic phenomenon of the decade and we still do not know if the end of this era is near.
ForeclosureFreeSearch.com is the leading online listing service for distressed properties.
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