The rate of real estate foreclosure nationwide is continuing to fall as the housing market improves and the economy regains pace. Foreclosures in Florida hit their lowest rate in 3 years back in February, while Milwaukee saw a decline of 0.7% on the year, showing a consistency in the rate of non-defaulting mortgages.
According to data from Lender Processing Services, the percentage of US households in arrears with their mortgage but not in foreclosure has also fallen on the year, down to a low of 6.8%, which complements foreclosure data in highlighting an improving picture for the housing market.In the wake of the crash of 2008, rates of foreclosures soared to record high levels as unprecedented mortgage defaults and the collapse of the sub-prime market led to widespread turmoil for housing nationwide. However, with foreclosure rates on the decline and property prices starting to show signs of regaining ground, it looks as if the wider housing economy might be beginning to move in the right direction.
Analysts have welcomed the results as an ongoing sign that underlying conditions were improving – essential for a wider national economic recovery. LPS suggested that a decline in foreclosures was symbolic of the recovery, and could help provide banks and mortgage lenders with the confidence they need to increase their lending activities to pre-crash levels.
Foreclosure is the process of repossessing a home for resale, in the event that the owners are unable to repay the mortgage on it. Foreclosures create homelessness and disruption in the lives of those they affect, but are taken broadly to be a sign of wider economic and housing market malaise.
The foreclosure process happens after the homeowner falls behind with mortgage payments. The effects can be more devastating when the home’s value has depreciated. However, with stubborn levels of unemployment and a tightness of capital across lending markets, the rates of foreclosure have increased substantially over the last few years.
According to the data, the five worst states for mortgage delinquency leading to foreclosure are Florida, New York, New Jersey, Mississippi and Nevada. The five top performing states are Montana, North Dakota, South Dakota, Wyoming and Arkansas, which have lower foreclosure rates and fewer mortgage arrears problems.
When facing foreclosure, individuals can choose to take a number of alternative actions to avoid the process. With the assistance of specialized legal help, it can be possible to work out other options including short sales and buy-to-rent-back schemes, which can enable the foreclosure option to be avoided. In many circumstances, homeowners simply want to stay in the homes they have saved and paid for, regardless of the debts attached to it. In some cases, these alternative options can represent better value for money.
The fall in foreclosure rates is being seen as an indicator of the ongoing improvement of the national economy. A housing market recovery in particular could be advantageous to growth and job opportunities across the US in the coming years, and hopefully can help prevent too many more families from experiencing the trauma of the foreclosure process.
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