New Jersey homeowners and those familiar with this blog may have heard about the slight nationwide decrease in foreclosures seen in the first few months of the year, as compared to a year earlier. The decrease was a small one, with many states still holding onto high foreclosure rates. However, whether due to still mounting debt or a still unstable economy, national foreclosure rates have gone up again — the first national increase in 28 months.
The term foreclosure brings negative emotions to mind for many people across the country. High foreclosure rates seem to signify a struggling economy with a struggling consumer class that can’t find financial stability amidst debt and unemployment. Additionally, the past years have demonstrated the ways that foreclosed-upon homes can bring down values of the other non-distressed homes in the area.
Yet, this news may not be all negative. According to experts, this 9 percent rise from April rates is made up of foreclosures that have been long overdue. Many of these foreclosures are left over from the robo-signing scandal of 2010 where lenders illegitimately pushed through foreclosure paperwork, resulting in a near halt in foreclosure proceedings while the scandal was resolved. Now, lenders are catching up and these foreclosures are able to move forward again, and are said to be a significant contributor to this recent increase.
Even with the increases, there were only approximately 109,000 foreclosures kicked off in May compared to nearly twice that in April. Experts seem to agree that while this appears to be a bump in the way to recovery from accumulating debt and foreclosure, the nation is on its way to resolving the worst of the housing crisis.
Source: Forbes, “Why The New Wave Of Foreclosures Is Good News For Homeowners,” Morgan Brennan, June 14, 2012