A few short years ago experts were predicting that by 2012 the housing market and foreclosure rates would return to normal. Now that 2012 is almost here, it seems that the predictions were not as accurate as everyone hoped. The down economy is certainly a factor, but this time, there is another culprit in the situation.
The primary reason 2012 is likely to be heavy on foreclosures is due to recent irregularities in the mortgage industry. Specifically, the paperwork was not being handled properly. Low-level employees were rubber stamping documents at an alarming rate.
It would have been impossible for the workers to review the paperwork and get the correct information and signatures in the flash of time they spent on each document. Perhaps they were under pressure to get a certain amount of work done. Maybe they were just poorly trained. For whatever reason, the foreclosure documents were signed thoughtlessly and mistakes were made. Eventually, legal action was taken to halt these foreclosures.
Now the mortgage companies have begun to revamp their processes and clear up these bad practices. They are now meeting with government approval and are getting back in the business of handing out foreclosure notices. By 2012, the big players should be in full swing, working on reclaiming properties from non-paying owners.
The bottleneck could have been avoided with proper training and supervision of all employees at these mortgage lenders companies. Yet, the number of foreclosures overall may not be much different. Instead of coming spaced out evenly over the months, there was a time when the process slowed down, and now there will be a time when the mortgage companies make up for lost time with their foreclosures.
The good news for homeowners is that it gives them a longer period of time to come up with the money to catch up their mortgages. If they have a chance of saving their home at all, they are more likely to do it with this extra time they have been given.
The good news for people who want to buy a home is that there will likely be a glut of REO homes on the market after awhile. Because of this, there will be inexpensive houses for them to choose.
Real estate investors will also see benefits, as they snap up the foreclosed properties, rehab them, and sell them again at a profit. They may have opportunities to buy homes to rent if they prefer. Investors can make the most of this bad situation if they have enough contacts and are good at reselling or renting homes.
It is a good time to raise capital to be ready for the 2012 housing situation. It is the best way for homeowners to keep their homes, potential owners to be ready to buy, and investors to be ready to make the best deals. There is no need to fear what will happen in 2012. Instead, look it as an opportunity, and get your ducks in a row.