Right Change: Foreclosures on the Rise, First Time in 27 Months

Reuters is now reporting a correction in the foreclosure numbers from May. Foreclosures rose for the first time in over two years as banks resumed handling the foreclosures after the mortgage abuse scandal earlier this year.

After banks settled with states for more than $25 billion it was expected that foreclosures would jump more as banks picked up foreclosures that had previously stalled due to the settlement. Foreclosure activity jumped over 9% from April to May. This turns out to equal that one in every 624 U.S. households received a foreclosure filing in January, up 3 percent from the previous month, according to a new report from RealtyTrac Bank repossessions also increased 7% from April to May after a 49 month low in April.

According to Daren Blomquist, RealtyTrac's Vice-President, “That the May numbers were up the month after that settlement was completed is an indication that lenders are more confident that there are clear ground rules to foreclose now, so they can play by the rules. The banks are getting to a place where they consider their foreclosure processing issues resolved, so they're confident enough to go ahead and push through more foreclosures.”

RealtyTrac's CEO Brandon Moore stated, "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."

Bloomquist did note the jump in foreclosure stats was not a sign that a new crop of borrowers was beginning to miss payments, citing figures from the Mortgage Bankers Association indicating new delinquencies fell in the first quarter of 2012.

With all of these new foreclosures coming into the market it can only mean bad news for the economy. With so many homes coming available it is sure to slow down the building and manufacturing sector once again, something this fragile American “recovery” can ill afford.

This news of foreclosures rising also comes on the news of more major layoffs. Nokia has plans to lay off a staggering 10,000 employees this year. With other large corporations and small businesses still sitting on the side lines in uncertain economic times it looks like the news is getting worse for our economy and Obama’s reelection’s hopes. With as many housing stimulus plans Obama’s has passed via executive order, this latest report proves that they are not working.

Back To Blog