Light at the End of the Tunnel?

In June the number of foreclosures dropped by 3 percent and based on industry data they are expected to show another slight decrease when the July numbers are released later this week.

By: James R. Lindamood 

This time next week many will be making the claim that the end of the foreclosure crunch is drawing near. Unfortunately, this so called light at the end of the tunnel is more of a dim glow than the bright lights everyone is hoping for. It may be true that the number of foreclosures are slowly decreasing each month, but it doesn’t mean that we will be throwing a party anytime soon.

In June the number of foreclosures dropped by 3 percent and based on industry data they are expected to show another slight decrease when the July numbers are released later this week. Many are quick to jump in and explain that the slight decrease is not caused by more people being able to pay their bills. Instead the decrease is being caused by courts jumping in and stalling foreclosure proceedings to allow homeowners more time to get their finances in order.

Federal assistance has also played a large part in the number of foreclosures being filed each month. With the recent approval of a bill to help bail out lenders Freddie Mac and Fannie Mae we may see the numbers go down even more over the coming months. Critics warn that this is not the end of the sub-prime lending crisis and that in time we will more than likely see the numbers increase again once the additional time granted by the courts has expired.