A report from CoreLogic released last Tuesday (7/31/12) revealed that completed foreclosures in the U.S. for the month of June held steady with May numbers at 60,000. That figure is down from a year ago, when June saw 80,000 completed foreclosures in 2011. Good news? It depends. Concurrent with this leveling off trend in foreclosures is a decrease in the rate at which short sales are occurring—which could, in turn, spike the number of foreclosures in the coming months.

For those of you in credit and collections, the impact of this news on your business could be difficult to predict. For instance, some might argue that if people can’t afford to pay back debt owed on their homes, then they probably can’t afford to pay back debt on other purchases. There’s clearly some truth to that logic. But, you could also argue that if people foreclose on their homes, which they couldn’t afford, and in turn rent property that they can afford, then they should have more income available to pay back debt. Either way, with more account holders in housing limbo, the skip tracers’ job just got that much harder.

Of course, much depends on where you live. In Northeast Ohio, for example, the downturn in the economy has increased demand for rentals to the point that it can often be cheaper to purchase a home than to rent one. So, losing your home and having to rent may not free up much cash in the end. In California, though, where it’s much cheaper to rent than to buy, an increase in foreclosures could benefit the collections industry—not only in terms of new accounts but in successful collections as well. By the way, California had the highest number of completed foreclosures for June 2012 at 125,000.

No matter which line of logic you follow, the current economic climate poses significant challenges to the credit and collections business. If you’re going to keep up with the new business and ensure higher collection rates, you’ll need to hire the best in the industry.