3% of US homeowners are predicted to experience foreclosure over the next two years. The primary culprit for this massive increase is the large amount of "subprime" loans that were given in 2005 and 2006.
In states that experienced the biggest housing boom, this foreclosure rate is expected to be even more harmful. In Nevada, nearly one in 11 homeowners is expected to go through some stage of the foreclosure process, and in Arizona, 1 out of every 18 households will default in payments and will likely foreclose.
This foreclosure rate will not only effect the homeowners, but will effect the value of homes in neighborhoods with high number of foreclosed homes. It will also make it more difficult for many sellers to sell their home as their will be increased competition of underpriced foreclosure homes.
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