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Foreclosures dropping, but market recovery slow

While foreclosures are dropping in Washington, D.C., and across the nation, the numbers are still more than twice as high as they were before the economic crisis started in 2008. From 2000 to 2006, the number of foreclosures averaged around 21,000 a month. In April 2014, CoreLogic, a firm that records housing information, reported 46,000 foreclosures. The company considers a foreclosure for this purpose to be a residence that is actually repossessed by the lien holder.

Foreclosures affect surrounding property values because homes can remain vacant for months or years before they are relisted, generally at a greatly reduced price. The Center for Responsible Lending confirmed that information and reported that foreclosures cost 92 million families a total of $1.9 trillion in decreased home valuations. The housing market has begun a slow recovery since the start of the year, but sales are still sluggish. Financial experts attribute the slower pace to fewer homes on the market and to interested buyers facing challenges in obtaining loans.

A representative with CoreLogic confirmed that the numbers are dropping and observed that those figures mean the market is slowly recovering. An economist with the National Association of Realtors thinks that total home sales will decrease slightly between 2013 and 2014. He believes that additional inventory and the building of new homes will benefit the market. Investors who quickly snatched up foreclosures might be the only ones who are disappointed with the news.

A bankruptcy could free up money that would otherwise be spent on credit cards or related loans so that the home owner might have funds available to pay the mortgage. A bankruptcy attorney might be able to provide clients with information on how a bankruptcy could help them.

Source: Consumer Affairs, "Foreclosures are down but there's a long way to go", Mark Huffman, May 30, 2014

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