California Foreclosures to Rise in 2011

It seems 2011 is set to be the peak year in foreclosures so far. Nearly 5 million borrowers are now behind on their mortgages for two months or more, and real estate experts say even more people will miss mortgage payments in 2011 because of job losses and mortgages that are too large. Many foreclosures were delayed because of banks pausing procedures last year, and those foreclosure proceedings will resume in 2011.

In 2010, one in every 45 U.S. households received a foreclosure filing which amounted to a record 2.9 million filings. That figures was up 1.67% from 2009, and in 2011 the numbers are outrageously higher even with mortgage interest rates at record lows. If the rates rise we shall see even more trouble.

The states set to experience the most pain will be Nevada, Arizona, Florida and California along with Michigan and Illinois. More than 50% of the foreclosure activity last year came out of just five states: California, Florida, Arizona, Illinois and Michigan. Some states are suffering because of economic woes, and others because the real estate market was over-heated and over-priced.

If the job situation does not turn around in the US, and if interest rates rise during this slump, then due to all this excess inventory we are about to see another terrible year in housing prices.