Foreclosures decreasing a positive sign for economy - ABC 33/40 - Birmingham News, Weather, Sports

Foreclosures decreasing a positive sign for economy

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Some encouraging news in the housing market. Home foreclosures are at the lowest level we've seen in five years. 

But, that creates another issue. All those service mortgage employees working to try to prevent foreclosures now have nothing to do.

Case in point, this week Wells Fargo cut loose close to five hundred mortgage positions across the country.

Most of those at the central mortgage office in Homewood. T
hose in the real estate industry say this is a good sign.

Bottom line is we are returning to a more stable market. Realtors and brokers say fewer foreclosures is an indicator of a healthier economy.

Chip Watts, president of the Birmingham Association of Realtors, remembers how bad the housing market was in 2009.

"The housing market is steady, inventory is shrinking, we're seeing a great return on sales in the last couple of months," said Watts. "The highest rate of foreclosures was in January of 2009 with 45 percent of all sales."

Look at it now! "This past month, as well as the month before that, it was 14 percent of all sales," says Watts.

David Franklin is a real estate broker who serves the Gardendale area. "W
e're seeing a decrease in the number of foreclosures," says Franklin. "Now, we're getting back to a regular market. And that's why foreclosures aren't as big of a part of the market anymore."

"We're down probably, 40 percent in foreclosures this year than we have been in past years," Franklin says.

Franklin credits stricter guidelines that came out of the housing crisis. "I think you are getting people who really can afford the homes in there, and getting us back to a very positive market."

Watts says, "We did see a significant tightening of funding restrictions that allowed us to recuperate from the recession for a period of time and get back into a normal market. Which I believe we are in a normal market."

And, as employees at Well Fargo's mortgage servicing center realizes their time in this position has passed. 

"That huge market is gone," says Franklin. "I don't think we'll see that market of foreclosures ever again."



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