By: Gaurav Bhola, MSM, Managing EditorSince June, foreclosure filings have gone up 9 percent, an increase of 93 percent during the same period last year. There were approximately 180,000 filings of auction sales notices, default notices, and bank repossessions in July. Overall nationally, 573,397 homes fell under these foreclosure categories during the first six months of the year. Also, during the same period, homes facing foreclosures jumped nearly 60 percent.
The recent crises in the stock market are mainly due to the subprime mortgage defaults. In the past five years, during the boom years of the housing market, subprime mortgages and other risky home loans were doled out to borrowers without proper credit consideration by mortgage lenders.
The current atmosphere has generated government action with the Federal Reserve injecting more than $68 billion into the banking industry to generate liquidity and resurrect voter confidence in the housing, mortgage, and stock market. However, the action taken last week seemed to have had a temporary effect in the recovery of the market from further downslide.
In addition, Congress may consider several actions to reinstate confidence into the mortgage market, including legislation aimed at reigning in the mortgage sector. Presidential candidate and Banking Committee chairman Senator Christopher Dodd (D-Conn) wants Bush to increase the limits on the mortgage portfolios held by Fannie Mae and Freddie Mac.
