On the Mend: Foreclosures Reach 8-Year Low

On the Mend: Foreclosures Reach 8-Year Low
  • Opening Intro -

    Here is some very good news: foreclosure rates have fallen to the lowest we've seen in eight years.

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Although a “normal” rate has yet to be achieved, the online marketplace RealtyTrac.com believes that 2014 will be when that rate finally stabilizes. RealtyTrac uses a national average for that determination; certainly local markets will always vary.

Negative Equity Rates

The last recession may have officially ended by summer 2009, but the residual impact has stayed with us. Indeed, although foreclosure rates are dropping, the percentage of homeowners with negative equity in their homes is still very high. Zillow.com puts that number at 23.8 percent for nearly one out of four homeowners. Negative equity is often referred as to “being under water.”

While changes in foreclosure rates and equity balances are encouraging signs, the trends across the country are often sharply different. Indeed, some markets are seeing a surge in foreclosures while others have seen foreclosures drop dramatically. Local conditions have the greatest impact on consumers and are what all homeowners should track. This is important if you are planning to sell your home as a market over run with foreclosures can depress your own home’s value.

Local Foreclosure Trends

In St. Louis, RealtyTrac.com reported a 40 percent drop in foreclosures over the past year. That beats the national average where foreclosure rates plunged 34 percent year over year. Just one in about 1,000 homes in the St. Louis area is currently under foreclosure.

In Nevada, foreclosures surged by 226 percent in August over the previous month largely due to changes in the state’s repossession laws. The Las Vegas Review-Journal reports that the new law has made it easier for banks to take back homes, thus the sudden surge in foreclosures. Although the law was loosened in June, a Homeowner’s Bill of Rights will take effect in Oct., what will likely slow down the foreclosure process again. It will likely take many years before “normal” is realized in Nevada, particularly in the Las Vegas area.

Options For Consumers

Consumers struggling to pay their mortgages may find relief by contacting their lender for assistance. It is important for homeowners to inform their mortgage representatives as soon as problems arise. A late payment won’t automatically trigger a foreclosure notice, but a pattern of late or missed payments can. Moreover, consumers will harm their credit if they continue to fall behind on their payments. Your lender can discuss your options including possible refinancing or a short sale.

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Categories: General News

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Auto Trends Magazine", an online publication. Matt covers campus, consumer, business and financial topics on various websites and weblogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".