Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
Now 27% of homeowners with mortgages owe more than their homes are worth. That’s up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That’s because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow’s chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
The so-called “robo-signing” events of the fall also forced the number of underwater mortgages higher.
When banks’ foreclosure paperwork came under scrutiny, many halted all repossessions until they could straighten things out. With foreclosures no longer being cleaned out of the system, more homes stayed underwater rather than moving on to foreclosure.
Armonk NY Homes
Armonk Luxury Homes