According to Realytrac , default notices, auctions and repossessions are down by 17 percent from a year ago. This should be good news, right?
Not so fast, this decline is mostly a result of the robo-signing scandals that were at the top of the news recently. As a result , states that use the court system to repossess homes are backed up because they are actually reviewing the paperwork. The lower numbers are simply a result of fewer homes being pushed through the system. The numbers for foreclosure notices are still very high and are showing no inclanation to even stabilize. With more and more people underwater and more in danger of either be foreclosed upon or just walking away from their homes , the supply of new homes ripe for foreclosure will not decline for many months to come.
Has anyone noticed that interest rates for home finance have been rising over the last month or two? What news has come out that would make interest rates rise. I think the answer is that no news has come out and banks have simply decided that they are not making enough money in the current market.
At the current time , bank are receiving basically free money from the government to turn around and loan out at approximately 4 percent. This is a historically low spread for the banks and since they have been forced to service what they loan out they do not feel comfortable with such a small spread on their money.
As a result , the re-finance market has taken a sharp decline in the last couple of months which is going to hurt real estate even more.
Get ready for a long ride.
