The US suffered an untold financial crisis in the year 2008. This led to the worst economic recession the nation has witnessed since the World War II experience. The crisis virtually affected all aspects of the US economy. The real estate business suffered a setback. The foreclosure inventory trend also declined. A clear understanding of the foreclosure inventory and the 2008 financial crisis is very vital. There are 6 vital aspects to consider. Let’s examine them now.
1. The trend of Foreclosure Inventory in 2008
The trend of the foreclosure inventory has been going down ever since the 2008 September financial crisis. There have been over 3.5 million completed foreclosures since the days of the crisis. Lots of decreases have been noted in the quarterly and yearly reports on foreclosure inventory. The number of loans in foreclosure inventory, decreased by 6% as at March, 2012. Of all the homes with mortgages, an approximate number of 1.4 million homes were seen in the March 2012 national foreclosure inventory as against the 1.5 million homes involved in the previous year.
2. The 2008 Melt Down
To understand the reason for the declining state of the foreclosure inventory, a look at the 2008 financial crisis is very important. Actually, the crisis began in September of the same year. It led to a major recession in the US economy and also caused economic meltdown in many other nations. In the same September 2008, the Lehman Brothers which is one of the World’s largest investment banks failed. The US stock market also went down drastically. Several big companies in the US downsized the number of their employees. The entire US economy came under great attack by the recession. This affected several areas of the economy including real estate and foreclosure deals.
3. Causes of the 2008 Financial Crisis
Several factors led to the 2008 financial crisis in the US. Market instability is seen as the one of the major factors. There were severe changes in the creations of new credit lines. This caused retardation on the economic growth and also dried up the money flow. Cheap credit access is also another factor that led to the crisis. People found it very easy to access credit loans for buying houses and making investments. The cheap credit system made more money available and hence caused people to spend money as they want. This later caused economic crisis in the financial sector.
The 2008 crisis went from bad to worse when greed set in. Many people in government got rich quick while the poor masses suffered in the process.
4. The Impact of the 2008 Financial Crisis on Foreclosure Inventory
The 2008 financial crisis left negative impact on the entire US economic. Virtually every aspect of the economy suffered the heat. In the real estate sector, lots of setbacks became apparent. The housing market declined. Access to mortgages skyrocketed. Many people who borrowed money from lenders couldn’t repay back the full payment. This led to foreclosure cases. In any case, the foreclosure inventory kept decreasing as seen in many states.
5. Foreclosure Inventory in Various States
Since the days of the 2008 financial crisis, the inventory has continued to decrease. The highest percentage of foreclosed assets was still very low in various states as at March 2012. Some states had higher percentages rates. Florida had 12.1%, New Jersey had 6.6%, Illinois had 5.4%, and New York had 4.9 % while Nevada also had 4.9%. The trend continues in many other states. Some states had the lowest percentage of foreclosed homes. Among them include Alaska with 0.8%, Wyoming with 0.7 % and South Dakota with 1.4% and Nebraska with 1.1 %
6. The Way Forward
the final point to consider in this excursus on understanding financial inventory and the 2008 financial crisis is the actual way to make things right. It’s very clear that the foreclosure inventory is coming down. To help the system, loan modifications should be introduced. The use of deeds-in-lieu and short sales should also be encouraged as best alternatives to foreclosures. This will help in ameliorating the impact of the 2008 financial crisis on foreclosure deals.