Repo Homes Reports Cause Housing Stocks To Fall

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With reports pouring in of increasing repo homes the housing stocks began to fall in March. Specialists report that government efforts to stem the tide of foreclosures are not being effective. The number of repo homes notices jumped by 57% in March reported RealtyTrac – an Irvine based tracking agency. More and more houses are being repossessed over by banks. This reads that more borrowers are walking out of their mortgages. Of all the houses in the real estate market a quarter are bank owned. This is slowing down sales as well as prices in many areas.

Government steps to alleviate the foreclosure crisis does not seem to be working – this is obvious. It is the opinion of Deutzche Bank after conducting a study and survey in the field. Analyst Nishu Sood stated that reports from their contacts on the current demands were all negative. Thus there is slim hope that government actions are taking or will make any difference to the gloomy foreclosure scenario. The study also noted that other similar trends across the country are discouraging the market. The country is dotted with vacant abandoned houses leading to apprehensions that the depression in the real estate will continue to rule.

The blame game continues as the foreclosure fire rages across the country. During the time of the housing boom the sub-prime floating mortgages were introduced to help those who could not avail of prime loans to have a house of their own. This is the American dream – everyone should own a house. In sub-prime loans the income of the loan taker and the value of the house were not thoroughly scrutinized. The target was to anyhow get a sanction and lay hands on the money and the house. The agents were motivated by high commissions. There was frenetic activity in the housing market with demand going up especially in places like Florida, California, Ohio and Nevada. There was no worry about repayment of the loan even if the interest rose because all were confident that in a couple of years the housing prices would rise and the loan could be repaid after making a neat profit. Unfortunately just the reverse happened. What goes up has to come down. This eternal rule applied to the housing market also. The bubble burst. Real estate markets fell. Foreclosures began to hit the borrowers surely and steadily leading to the national crisis of today.

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