Foreclosures Declining? Not Really...

The number of U.S. foreclosures are declining overall, according to Realtytrac.com. But are the numbers accurate?

A number of states have recently passed laws that extend the amount of time homeowners have to work out financial arrangements with their lenders. Some states require lender to give an additional 30 days before a foreclosure notice is filed, and some are adding an extra 3 months after a filing to allow homeowners to to find a solution. The drop in foreclosures are no doubt a direct reflection on new legislation, and states should be commended on the action taken. Unfortunately, I believe they are just delaying the inevitable.

The number of homeowners entering pre-foreclosure is rising, and housing counselors are more inundated than ever with calls and requests for assistance. That shows that homeowners need education, not just time. The housing market still has a while to go before it bottoms out, and homeowners are still struggling for help in this drastic economic environment.

If we have an increase in education and outreach as well as a time extension, we may be able to lessen the wave. However, I don't think that will happen in the next few months. What I feel we will see in the fall and winter is a "sudden" spike in foreclosure activity - those who were given extra time will run out of it and end up losing their homes later rather than sooner.