The first quarter of 2012 reports are in and showing foreclosure filings have fallen to their lowest levels since 2007. While the number of new foreclosures are slowing to levels prior to the housing market collapse a few years ago, this new data has brought both hope and skepticism to the struggling industry.
Good And Bad News
The good news is that the trouble with foreclosure filings could soon be over. While this doesn’t mean we are out of the water just yet, it does mean that fewer homeowners are at risk of foreclosure and many of these families will be able to find adequate mortgage debt solutions. With the help of federal programs such as the Making Home Affordable program and its subsidiaries, many are hopeful that the more homeowners will be able to get help before ending up in foreclosure.
Industry skeptics aren’t quite jumping for joy as many of them continue to focus on what the drop in foreclosures could really mean. Low foreclosure numbers could mean that lenders are already saturated with foreclosures, leaving a back log of abandoned and unkempt homes to manage. Already beyond capacity for unloading the current foreclosure stock into the buyer’s market, many lenders may be avoided foreclosures simply because the incentives are greater for potentially losing money through programs like HARP 2.0. Further, home values are too depreciated to even warrant potential buyers for such distressed properties leading to longer lasting problems of for the real estate market.