Bank Repossessions Woes Escalate In 2008

Posted on June 19, 2008
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As 2008 advances there is no doubt that bank repossessions woes are escalating in comparison to what it was in 2007. Washington County records show that that there have been more judicial foreclosure transactions this year already, in comparison to the entire 12 months of 2007. This year 74 sales have been noted while in last year all total there were 74 sales. In June there has been a slowing down of pace with only 5 scheduled sales but only these few numbers cannot be a base for future optimistic calculations.

The mortgage companies usually engage in non-judicial foreclosure sales. These are showing no signs of decrease. In Washington and Benton Counties 165 and 203 have been listed respectively.

Kathy Deck of the Center for Business and Economic Research, Arkansas University, warns, “It’s too soon to call a peak”. Northwest Arkansas is a mini echo of what is going on across the country. Job growth has dwindled and a quickly bloated housing market is bursting at the seams. In 2005 Benton County had witnessed 218 foreclosure sales but by 11^th June 2008 already 198 properties have been sold. Deck is not surprised at the figures of Benton County because earlier this region had seen frenetic housing activity. The consequences are but inevitable. Two thirds of the new housing complexes and units of Northwest Arkansas are from Benton County and one third are from Washington County.

The reason for these high numbers are that people went on a house buying spree at the wrong time, assuming that prices would continue to spiral. They hoped that by refinancing as equities rose the going would be good and mortgage dues would be paid off leaving a profit. But the opposite happened. Another cause is that the pace of inflation became higher than income growth. It was the borrowing culture that spelt the foreclosure doom.

What is happening here is happening across the nation. In USA the number of foreclosures increased by 65% in April 2008 from what it was in the same month in the previous year, according to RealtyTrac. The numbers include non-judicial or non-statutory foreclosures – the numbers not being easily available from public records. From RealtyTrac it appears that the national foreclosure figures have reached an all time record. April indicated the highest foreclosure activity. All sections of society from lenders to borrowers and from state to federal governments are affected.

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