During the month of January, foreclosures increased 3% over December's level. There were 210,941 foreclosure filings, which include default notices, scheduled auctions and bank repossession. This was nearly 20% fewer than in January 2011. However, this is a temporary lull. The rate of foreclosures in 2012 will probably increase as banks move through the shadow inventory that accumulated in 2011.
According to RealtyTrac CEO Brandon Moore, "We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation's largest lenders,"
Now that banks have clear guidelines to follow when pursuing the foreclosure process, they can "push through" the mountain of foreclosures that accumulated last year during the robo-signing investigations. Some states have already seen an increase in foreclosures, including: California, Arizona, Florida, Illinois, Indiana, Massachusetts and Pennsylvania.
What It Means to You
A lot of people have been asking me recently if it's time to start investing in real estate again. It seems like the housing market is finally starting to look better. That's probably because of the hiatus in foreclosures in 2011. If, in fact, banks start cranking out foreclosures again, then this could depress the housing market in 2012.
However, many housing market analysts believe this backlog will finally start to be resolved by 2013. Unfortunately, they've been saying that since 2008. It may just make sense to wait-and-see how foreclosures look next month.
Of course, if the dollar falls in value significantly enough, it could make U.S. real estate cheap to overseas investors. Perhaps the best hope for the U.S housing market is an increase in foreign direct investment.
- Obama Wants to Help Responsible Homeowners
- Foreclosure Solutions
- Foreclosures Fall in 2011, Will Rebound in 2012
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