Associated Press has posted an article that discusses how there will likely be over 1 million foreclosures in 2011, which is more than any other year since the housing crisis began back in 2006. Around 5 million homeowners are at least 2 months behind on their mortgage payments and experts say that in the upcoming year, even more people will fall behind on payments due to job losses and the amount owed on loans will, in many cases, exceed the value of the home.
“2011 is going to be the peak,” said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year.
On Thursday, Freddie Mac reported that fixed mortgage rates dipped this week for the second straight time, extending a sliver of hope for some home owners. .
The average rate on the 30-year mortgage dropped to 4.71 percent from 4.77 percent the previous week. The rate on the 15-year loan, a popular refinance choice, slipped to 4.08 percent from 4.13 percent.
But both are a half-point higher than the lows they reached in November. The 30-year loan rate hit a 40-year low of 4.17 percent and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records starting in 1991.
This dip pushed borrowers to try to refinance, but prospective homebuyers are reluctant to purchase homes. The current low mortgage rates just aren’t incentive enough to push people to buy homes because of the impending high unemployment, tightening credit standards, and home values continuing to fall. The number of foreclosures is expected to stay elevated this year, which will push home prices down as much as another 5% before finally bottoming out.
The number of homes that received at least one foreclosure-related filing in December was the lowest monthly total in 30 months. Total notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
Foreclosures will continue to remain high in states that were hit the worst: California, Florida, Arizona, and Nevada- where nearly half of all the country’s foreclosures have occurred, roughly 1.5 million. States that are struggling economically, like Michigan and Illinois, will join those states with the highest numbers of foreclosure.
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