Foreclosed Homes Listings Continue to Grow Last Month- By: John Cutts
Whoever said that the housing market in California is nearing its bottom may be surprised to learn that foreclosed homes listings in the area continued to grow last month, particularly in the Los Angeles County.
According to the market data, one out of 150 homeowners in the county received a notice of foreclosure last month. Industry analysts said that bank foreclosed houses that received default notices totaled 22,540 properties last month, representing a 70 percent increase from the same month a year ago and 5 percent higher compared with June figures.
They pointed out that a flood of foreclosed properties on the housing market tend to wash out home values, forcing homeowners to sell their distressed properties quickly so as not to incur more losses brought about the drop of property values.
Industry analysts said that the market should expect more difficulties related to foreclosure before it could truly say that it is on its way to full recovery. While many of them agree that the market may be entering the bottoming stage, the high unemployment rate and volume of foreclosed houses that have been held off by moratoriums are expected to derail whatever recovery progress the market has achieved for the past several months.
Analysts said that there is still a large inventory of distressed properties that banks need to foreclose, adding that tons of bad assets are still out there.
They pointed out that the rising unemployment rate and growing number of homeowners whose properties are valued less than their mortgages are creating a whole new group of people who are in danger of losing their homes to foreclosure.
A market report stated that the Obama Administration's loan modification program designed to help thousands of distressed homeowners avoid foreclosure and remain on their homes has failed to meet its target numbers. The program has worked only on some areas in California.
The report noted that 70 percent of the total loans modified have re-defaulted after six months.
Meanwhile, the federal tax credit given to first-time buyers and the below market average prices of foreclosure properties have helped push the demand for foreclosure properties. In some areas, the increase in demand resulted to dwindling supplies and multiple bids from buyers. This pushed prices to inch up.
However, the coming flood of foreclosures is expected to halt the upward market trend.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.