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14 August 2008

US foreclosures up 55%

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by Kay Mitchell

US foreclosures up 55%

According to analysts, Realtytrac, over 272,000 people in the US were issued with a foreclosure notice last month – this represents an increase of 55% compared with last year.

Approximately 77,000 properties were repossessed by banks, according to the figures, while an astounding 17% of the homes up for sale are foreclosure properties.

Florida and California suffered the highest rate of foreclosures – areas which are traditionally investment destinations for Britons seeking property overseas.

The figures highlight the problems the market faces, which are a result of the credit crunch.

In the UK, 18,900 homes were taken into possession by lenders during the six months to the end of June, compared with 12,800 homes in the same period in 2007.

Both the UK and the US have been affected by the credit crunch, but sub-prime borrowers in the US have been far more likely to fall behind on mortgage payments.

A new legislation was introduced last month by the US Government to try to prevent homeowners losing their properties.

As a result of this, the number of foreclosures could start to stabilise in the first quarter of 2009, according Realtytrac.

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