First Quarter of 2011 May See Record Foreclosures
In the last months of 2010, home foreclosure sales slowed dramatically. According to real estate experts, there were two factors responsible for this slowdown. Mortgage lenders generally halt foreclosures during the busy holiday season, so the drop in repossessions is something to be expected, more or less, every year. However, this year was especially slow due to the so-called ‘robo-signing’ controversy of last fall. Because of the accusations that banks were improperly handling and processing foreclosure documents, many lenders halted foreclosures as they re-examined their processes. Now, however, both the holidays and the controversy have passed, leading many experts to predict that the first few months of 2011 will be ones for the record books.
According to real estate experts, thousands of homes are lying in wait, either in default or already in foreclosure, waiting for sale. Because of the high number of foreclosures postponed near the end of 2010, analyst Rick Sharga says that banks are likely to repossess up to 100,000 properties this month alone. “We always have a seasonal uptick in the first quarter, and I think it will be accelerated because of delays that the servicers will be making up for it in the first couple months,” he said. “I’d be really, really surprised if we didn’t see a probably record quarter in the first quarter of this year.”
Anticipating the high repossession numbers, real estate agents are preparing for the uptick in homes for sale. Economists are predicting that real estate market recovery may still be a long way off, as unemployment, which is currently hovering near 9 percent, is not predicted to make a large-scale improvement in 2011. The housing market cannot improve until people find jobs and feel financially secure enough to buy a home.
However, Lawrence Yun of the National Association of Realtors is optimistic. “Hopefully the improving economy, job creation, will provide the necessary housing demand to absorb the inventory that will be reaching the market,” he said.
Source: NPR, “U.S. Home Foreclosures May Top 100,000 in January“, Tamara Keith, 3 January 2011