Los Angeles bank foreclosures continue to defy local, state and federal government prevention efforts. Recent market data showed that 73 percent of the total homes on the market for sale are foreclosure houses.
The figures showed that out of the 17,000 properties on the market for sale, over 12,500 were distressed properties. Industry experts said that these figures only showed that the Home Affordable Modification Program (HAMP) of the federal government worked only as a stop gap, delaying what is inevitable.
The federal program is designed to help homeowners who are struggling to pay their monthly mortgage. It aims to reduce monthly loan payments for as many as 4 million borrowers nationwide by modifying loans to make them affordable but industry analysts said that the program only postponed foreclosures, prompting them to predict another flood of Los Angeles bank foreclosures in the coming months.
In August, cancellation of repossession sales declined by almost 7.5 percent to 9,976 compared with July figures. Industry analysts pointed out that there was no sign that foreclosures delayed under HAMP were canceled after a 3-month trial period.
The federal program involves a trial period of 3 months during which repossession activity is postponed to give a chance to homeowners to fulfill the reduced payment agreed upon under the loan modification program.
Market data showed that the number of impending foreclosures that were postponed upon request of lenders increased twice since the program was launched. Last month, the number of foreclosure properties scheduled for sale totaled 131,300, higher than the 64,177 posted by the end of February 2006.
According to industry analysts, if the federal program succeeds, the cancellation rate of foreclosures would be dramatic. However, if the program fails, the number of foreclosure sales would increase.
Industry analysts said that the current housing market is still in a limbo. Many government programs designed to prevent foreclosures have yet to prove their mettle. In the county of Los Angeles, the number of homeowners who are behind on their mortgage payments remains at a high percentage of 10, with one in every 10 in default by 90 days or more.
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News Source: BankForeclosuresSale.com
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