The Long Lasting and Unfortunate Legacy of the Foreclosure Crisis
With the foreclosure crisis behind us, as a nation we look to the future…and it’s not looking particularly bright. A Bloomberg study has shown that only about one in four former homeowners who lost property during the housing crash will become buyers again. This means that of the 9.3 million owners who went through foreclosure or were forced to sell at a loss, only about 2.4 million will be likely to return to the housing market. With tight credit and strict mortgage underwriting, there are not many options for those who previously faced foreclosure. Although, there is a glimmer of hope for Floridians, since Florida had such a high rate of foreclosure early in the housing crisis, we will be seeing some of the biggest shares of return buyers over the next five years. This of course depending on whether buyers are able to come back to the market despite living in areas where prices have recovered and affordability may be out of reach.
On a brighter note it’s not all bad news out there, well not for the rest of the country. A Black Knight analysis of the nation’s negative equity situation shows a trend of overall improvement…except where? You guessed it, Florida. Nevada and Florida continue to see the nation’s highest negative equity rates, with 15.1% of borrowers being underwater. This is a shocking statistic when compared to nation’s negative equity rate which is around 8%.
Sadly, Florida is not the only state feeling the lasting effects of foreclosure. Atlantic County, NJ had the highest foreclosure rates in the country this quarter. A RealtyTrac report found that one out of every 252 homes in Atlantic County was foreclosed upon this March, quadrupling the U.S. rate of one in 1,092. This is not a new trend for Atlantic County, who had to close four of Atlantic City’s twelve casinos. While hope may seem far off and the painful and lasting legacy of foreclosure is still being felt, the best course of action for those affected is to stay strong, defend your home, and evaluate any and all options available to fight foreclosure and its lingering consequences.