Foreclosure is a scary word, but experts say it is a word that needs to used more often. It is something that no one wants more of, but it is something that this market very well may need. The Obama administration has tried with multiple programs to help save the fledgling market to no avail.
According to CNN Money, some housing experts say that if the administration is interested in the future, it should help speed up the foreclosure process to get the delinquent borrowers out and to get the foreclosed homes on the market and back into use.
Some of the July ’11 numbers on delinquency are staggering:
Thomas Lawler, founder of Lawler Economic & Housing Consulting, thinks this is a dangerous pattern emerging. “Delaying foreclosure increases the percentage who’ll likely never catch up”, Lawler said. The delaying of foreclosure also means that vacant properties can fall further into disrepair and this can hurt surrounding property values.
The other key besides speeding up the foreclosure process is facilitating the resale of these properties that can lower home values due to the increasing amount of vacant properties. “There can’t be a glacier hanging over the market with everyone waiting for it to fall,” said Jim Gaines, economist at the Real Estate Center at Texas A&M. “Those properties have to clear the market.”
Not everyone is pushing for faster foreclosures. Some believe that mortgage holders could look to forgiving some principle to home owners who are not far behind on their payments. Foreclosures are expensive to process, and many companies may save money by allowing the current borrowers a way to get back on track. Some say the administration could also help by changing the refinancing program, allowing some borrowers to take advantage of today’s low interest rates.
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