Study: Foreclosures increased by 7 percent during first quarter of 2010

Despite marginal progress in the housing market so far this year, homeowners are still struggling to stay above water on their mortgage payments as they consolidate debt and begin the foreclosure process in increasing numbersthis quarter.

According to Bank Foreclosures Sale, new data released Monday showed that foreclosures across the country increased by 7 percent in first quarter of 2010 compared to the previous quarter. While the number of default notices fell by 1 percent during the quarter, bank repossessions shot up by 36 percent during the same time period.

"A repossession is usually the final stage of a foreclosure," remarked Simon Campbell, a business analyst with Bank Foreclosures Sale. "The properties are repossessed, and then sold off from there. So, now the banks and lenders have a huge supply of REO homes to deal with."

However, while the figure was somewhat dire for those in the housing market, Campbell added that the rise in foreclosures would be "great news for buyers" who would receive discounted prices because of the high inventory

"I wouldn’t be surprised if we see average sale prices really drop in the coming months," he added.