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Will foreclosure rates rise in 2012?

Several reports are indicating that foreclosure rates were artificially low during 2011 because of lenders and banks dealing with their own lawsuits with the Attorneys General across the United States.  Now that has been settled, foreclosures may be back on the rise.  So the question really has to do with the economy as a whole.  Has the economy strengthened?

Indianapolis Star: “Mortgage lenders — who had put the brakes on many foreclosures in Louisville and elsewhere while they fought a nationwide legal battle over their practices — are expected to increase foreclosure filings again this year after reaching a $25billion settlement with attorneys general from 49 states, including Kentucky and Indiana.

. . . Experts say a slowdown in foreclosures last year was related to the legal issues, rather than an improvement in borrowers’ ability to afford their mortgages or sell their homes.  Last year, 3,458 Jefferson County properties were scheduled for foreclosure auction, a 35 percent decrease from 2010, according to Edith Halbleib, master commissioner of Jefferson Circuit Court.

Properties that were actually sold at auction dipped 20 percent to 2,061. And 4,338 foreclosures were filed last year in Jefferson County, a 16 percent drop from 2010.”

So while the economy continues to look better as each week goes by, it may be that we are not out of the woods yet.

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