U.S. real estate foreclosures soar 81 percent in 2008

January 15, 2009 by · Leave a Comment
Filed under: Real Estate News 

It will get worse in 2009, we now have alt-A and option ARM (pick & pay) loans coming due this year and 2010.  This will put continuing downward pressure on real estate prices.  With so much of the average American’s wealth tied up in their home, we will not see a full recovery until this process is completed or incomes rise enough to cover the difference.   This will be reflected in reduced spending on discretionary items and more savings as people are much more risk adverse in this uncertain economic environment. 

News: 

U.S. foreclosure activity jumped 81 percent in 2008, with one in every 54 households getting at least one filing notice, suggesting various state laws and private programs to slow the process have been ineffective, RealtyTrac reported on Thursday.

Nearly 3.2 million foreclosure filings on 2.3 million properties were made last year, the Irvine, California-based research firm said. Filings include notice of default, auction sale or bank repossession.

“Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami,” James J. Saccacio, chief executive officer of RealtyTrac, said in the report.

 Foreclosure activity did slow in the fourth quarter overall, declining 4 percent from the third quarter, but jumped nearly 40 percent from the fourth quarter of 2007.

And foreclosure activity last year was up 225 percent from 2006, the year home prices began a deep slump that prevented many homeowners from selling or refinancing.

Home prices have plunged more than 20 percent from the summer of 2006, according to Standard & Poor’s/Case-Shiller measures.

Filings leaped by 17 percent in December from November.
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