Sub-Prime Crisis Reflected in Growing Repossessions

The number of houses being repossessed in the US has dramatically increased over the course of July, according to figures released today.

The report today, released by property think tank RealtyTrac, reflected a significant jump in the number of homes repossessed by mortgage lenders in the US last month, thought to be as a result of the growing unrest in the sub-prime sector.

After poor housing market performance over the last few years, banks and mortgage lenders lightened lending policies in the risky sub-prime sector, focusing on mortgages to those with a poor credit history.

However, with rising defaults and now growing repossessions as the sub-prime sector collapses, many major national lenders have been left facing liquidation, prompting fears of a credit crunch of global proportions.

According to the figures, repossessions increased by 93% on the year in July, showing a significant 9% rise from even last month’s figures, which analysts have blamed almost entirely on the sub-prime sector and rising interest rates.

Amongst the most startling of indicators from today’s report came with the finding that roughly 1 in 693 households were associated with foreclosure filings over the course of last month.

Also released today in a separate report were figures showing a decline in employment within construction industries, reflecting the severity of the market in housing.

The news has come as no surprise to analysts, who have already felt the wrath of the sub-prime crisis through torrential sell-offs on stock exchanges around the world during the course of last week.

However, the fear now is that markets will falter from this weeks rebound to slide back into red, as investors settle to the reality of rising foreclosures and tighter credit policies worldwide.

Analysts are predicting after a day of mixed trading results across the globe, investors could begin to lose confidence as the week progresses.

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