Perhaps you are wondering why there are so many foreclosed homes in the United States when the economy is showing signs of improvement in many parts of the country. Recent reports indicate that the economy in Southwest Florida is improving and new developments and constructions are ongoing. Can foreclosure keep happening even as the economy improves?
According to Roger Beattie, a real estate expert, foreclosures went up in many locations making people confused because they view foreclosures as recessionary. However, it should not be viewed as a worsening of the economy. Some of the reasons many of these bank actions are occurring is that lending and financial institutions have run out of time. According to Beattie, banks have allowed troubled homeowners to defer payments for three to six months and in some cases over a year. During this deferral period the federal government has announced assistance programs and has effectively stretched out the time frame prior to active foreclosure. In this period, the federal regulators are cracking down on banks and now challenging higher cash reserves to recompense for the dreary performance of their mortgage portfolios.
On a national scale, although the economy has improved in many areas, unemployment is still high and many are still struggling to pay off their debts. In addition, there are people who were affected by natural disasters adding to unexpected expenditures. In NJ where hurricane Sandy struck the hardest, many lost their homes, livelihood and money. Time will tell when they will be able to recover.
With that said, people should not only look at foreclosures as a sign of another recession coming up because there are many factors why homeowners are losing their homes. It can be because they are still unemployed or they have experienced natural disasters and they are struggling to recover from the event.
Dave Osborn of Marco News reported that foreclosed home sales in Southwest Florida
went up from July to September. Nearly 40 percent of such sales increased are for Naples-Marco Island. This is similar to Cape Coral-Fort Myers foreclosures, in the third quarter, foreclosed sales were 652 as compared to the reported 356 in the previous quarter. This is an astonishing 83 percent increase; this figure is from Irvine, Calif.-based RealtyTrac.