Foreclosure Numbers Released

RealityTrac, an independent company that tracks foreclosures in 100 different major cities, released its numbers today and the outlook doesn’t look good.

During an interview today with CNBC Rick Sharga, Vice President of Marketing with RealityTrac, stated that majority of the foreclosures were fueled by a few of the states. The hardest hit came from California, Ohio, and Florida. Other major problem states consisted of Michigan, Colorado, Arizona, Indiana, and Texas.

Sharga also stated that there are a verity of reasons why these markets are preforming poorly. Some of these states are being fueled by affordability issues like California and Arizona. These areas had a lot of people that overextended themselves to buy properties with riskier adjustable rate mortgages where many have gone bad. Las Vegas Nevada and Florida had a lot of speculative buying. While others like Michigan and Ohio are suffering from unemployment issues.

RealityTrac estimates that somewhere between 24 and 30 percent of the homes purchased that are in foreclosure have been the result of speculative buying. This being a best guess seeing as mortgage documentation doesn’t state the purpose of the borrower purchasing a home. In addition to this many investment properties were purchased as primary and secondary homes so investors could get better rates on their home loans.

Sharga also stated that he sees the peak of the foreclosures to happen towards the third quarter of next year. This is because they are predicting that the majority of adjustable rate resets to happen around May or June of next year and it’ll take some time for these people to end up in foreclosure.

To watch the interview on Foreclosure Reports head on over to CNBC.