Current Weather
The Spy FM

Foreclosure Deal May Mean More Foreclosures This Year

Filed by KOSU News in Business.
February 9, 2012

That big, $25 billion mortgage settlement that we’ve been hearing about forever is finally done. The deal involves five big banks and grew out of the robo-signing scandal, where bank employees signed off on thousands of foreclosure documents without reading them.

The biggest chunk of the settlement will go toward reducing what underwater borrowers owe on their mortgages. (To be underwater on your mortgage is to owe more than your home is worth).

The settlement will help an estimated 1 million homeowners. But 11 million homeowners are underwater. And while many of those people will continue to pay their mortgage, others are likely to go into foreclosure.

In fact, the foreclosure process slowed significantly last year, as negotiations over the settlement dragged on and banks waited for the details to become clear. Now that there’s a settlement in place, the rate of foreclosures is likely to pick up.

Last year, banks repossessed just over 800,000 homes, according to RealtyTrac, a company that tracks this sort of thing. This year, that number is likely to be over 1 million, Daren Blomquist, a VP at RealtyTrac, told me this morning.

Another million homes are likely to be repossessed 2013, he said. In a normal year, by comparison, the figure would be below 500,000.

Repossessions are not only painful for the people who go through them; they tend to have a broader impact on the housing market, because foreclosed homes tend to sell at a discount.

In other words, it could still be years before the housing market gets back to something resembling normal. [Copyright 2012 National Public Radio]

Leave a Reply

9PM to 5AM The Spy

The Spy

An eclectic mix of the Spy's library of more than 10,000 songs curated by Ferris O'Brien.

Listen Live Now!

5AM to 9AM Morning Edition

Morning Edition

For more than two decades, NPR's Morning Edition has prepared listeners for the day ahead with two hours of up-to-the-minute news, background analysis, commentary, and coverage of arts and sports.

View the program guide!

9AM to 10AM The Takeaway

The Takeaway

A fresh alternative in morning news, "The Takeaway" provides a breadth and depth of world, national and regional news coverage that is unprecedented in public media.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center