US Homeowners Face Repossession in Record Numbers
While homes going into repossession in the UK dropped second quarter from first quarter as well as numbers from 2009, banks are seizing homes in the US at almost record numbers. The housing market is still facing a very bad struggle. This will impact the wider financial market. This is bad news since it was the US housing market that triggered the 2007 credit crisis.
Repossessed homes for July reached 92,858, up 9 per cent of June and 6 per cent from July 2009. The all time record high was in May this year which was only 1 per cent above the July numbers. The increases in repossessions has been ongoing for eight straight months. US Banks are writing off a massive amount of debt. In the first quarter they wrote off 5.1 billion pounds ($8 billion) and could easily match or surpass last years write off of $31 billion. RealtyTrac’s Rick Sharga, whose company released the US data, does not believe the foreclosures have peaked yet. He said: "Repossessions coupled with the fact that we’re still looking at 5 million seriously delinquent loans, many of which would normally already be in foreclosure, really suggests that what the banks are doing is managing inventory levels. Home sales fell in the US by 5.1 per cent in June. According to research released by Zillow.com, 20 per cent of all US mortgages are experiencing negative equity. Forecasts for third and fourth quarter by analysts show no relief in sight.