2011 Foreclosures Expected to Increase

The number of foreclosures is expected to increase in 2011 as more mortgage defaults work their way through the pipeline. Rick Sharga, a senior vice president for RealtyTrac, said there were approximately 1.2 million bank repossessions in 2010, 900,000 in 2009, and “We expect we will top both of those numbers in 2011,” he said.

Many of the foreclosures originated in 2010 but were put on hold due to the robo-signing controversy. In addition, the market should expect to see new foreclosures due to high levels of unemployment and upcoming interest-rate resets on adjustable-rate mortgages. Interest rates are currently rising and these resets will increase monthly payments for some homeowners, throwing them into default.

As to housing prices, you’re not likely to see home prices appreciate next year as there is a large amount of excess inventory on the market along with high unemployment. This basically means that you can expect continued depressed home prices in the year ahead.