Despite some positive signs starting to surface in select housing markets, foreclosures are still on the rise:
There were more than 360,000 properties with foreclosure filings -- including default notices, scheduled auctions and bank repossessions -- an increase of 7% from June and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes. In fact, one in every 355 U.S. homes had at least one filing during July.
Nevada, California, Arizona, and Florida continue to lead the nation in foreclosures as some foreclosure moratoriums are phased out:
The worst hit areas continue to be in the "sand states," with California posting the highest number of total filings, 108,104, and Nevada posting the highest rate of foreclosure at one for every 56 homes.
The other hardest hit states are Arizona, at one filing for every 135 homes, and Florida, at one for every 154. Las Vegas, with one for every 47 homes, had the highest rate among metro areas. That's Sin City's 31st consecutive month topping the list.
Servicers initiated foreclosure proceedings against 290,000 mortgage borrowers, a jump of nearly 20% from February's 243,000, and the highest monthly total since the coalition began tracking data in mid-2007. Starts have risen by more than a third since January.
From the beginning:
Since the mortgage meltdown hit in July 2007, 1,447,866 homes have been lost to foreclosure.
Needless to say, foreclosures are a sad and unfortunate circumstance confronted by many Americans today. This video gives brief insight to markets at work and the opportunities that abound from the depths of despair. The real estate industry continues to crash but, as a result, another industry is born.
U.S. foreclosure filings spiked by more than 81% in 2008, a record, according to a report released Thursday, and they're up 225% compared with 2006.
A total of 861,664 families lost their homes to foreclosure last year, according to RealtyTrac, which released its year-end report Thursday. There were more than 3.1 million foreclosure filings issued during 2008, which means that one of every 54 households received a notice last year.
And .... as has been quite evident for sometime now during this economic mess, nothing is working to prevent additional foreclosures! Despite everyone's attempts (pretty pathetic to this point) the markets are doing their thing:
"Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami," said James Saccacio, CEO of RealtyTrac in a statement.
And despite those efforts on the part of both the government and the banking industry to quell the housing crisis, defaults continued to climb as 2008 came to an end. Foreclosure filings were up 17% in December over November, and rose 41% compared with December of 2007.
"The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM, Fortune 500), along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners," said Saccacio.
Perhaps a rest before the walloping continues and the reality that more future mortgage payments won't be able to be made:
Both of the government-sponsored mortgage giants suspended foreclosures starting November 26, 2008 through January 31, 2009.
The devastating numbers are unlikely to improve soon.
"I don't see how we can avoid three million foreclosures again in 2009," said Rick Sharga, a RealtyTrac spokesman. His company now has nearly a million sales listings for bank-owned homes.
A brief look back in history for comparison:
"The number of mortgages 30 days past due are still below what they were during the 2001 recession," said Brinkman. But the proportion of those loans that went into foreclosure was much lower, he added - about 10%.
What's happening in your neighborhood?
The three states hit hardest by foreclosure in 2008 were Nevada, Florida and Arizona. In Nevada, 7% of homes received a foreclosure filing - such as a notice of default, auction sale notice or foreclosure sale - during the year, up 126% from 2007.
Florida filings soared 133%, hitting more than 4.5% of all households, while Arizona filings jumped 203%, also to about 4.5%. California had the highest total number of filings for any state, 523,624, more than double 2007 levels.
Stockton, Calif. had the highest rate of foreclosures of any metropolitan area, at 9.5%. Las Vegas was second with 8.9% and Riverside/San Bernardino Calif. was third with 8%.
Of the top 20 cities for foreclosures, most are in the Sun Belt, with the exception of Detroit at number 10, Memphis, which ranked 18th and Denver which was 19th.
The broken record continues to scratch out the worn out tune of housing doom and gloom. Foreclosures, foreclosures, foreclosures!
For many, this goes beyond a sad story that you read about in the newspaper or hear about on the local nightly news. Right now, this is the harsh reality of hundreds of thousands of people throughout the country. Foreclosure! Behind the scenes, in the trenches. Ugly times.
Fannie Mae is finalizing a national policy that will allow tenants to remain in their homes even if their landlord goes into foreclosure -- a landmark decision for tenants.
The policy will be in effect Jan. 9, Fannie Mae said Sunday, and reflects growing pressure on the mortgage company from a legal-aid group that threatened to sue over recent evictions. The company said it will also ensure its current holiday moratorium on new evictions is being followed until the new policy takes effect.
In a previous post (Foreclosures Hurt Tenants Too) we highlighted and discussed the fact that some tenants don't even realize that the owner of their residence is in trouble until the Sheriff knocks on the door. In regards to that aspect of a foreclosure, Fannie Mae looks to be doing their part to help prevent this unfortunate circumstance.
Could you imagine if you were living up to your end of the bargain and you still get thrown out on your ear with no notice? Doubt you'd like it!
November foreclosure filings fell to 259,085, or one for every 488 households in the nation, according to the latest report from RealtyTrac, the online marketer of foreclosure properties. That was down from October, but up 28% from November of 2007.
A total of 78,179 families lost their homes during the month, down 8% from October when 84,868 homes were repossessed by lenders. A total of 1,014,618 homes have been lost to foreclosure since the housing crisis hit back in August 2007.
Loan modifications not getting the job done:
Meanwhile, evidence is mounting that current foreclosure-prevention efforts are falling well short of the mark.
A Dec. 8 report from the Office of Comptroller of the Currency stated that more than half of the borrowers who had their mortgages modified in the first half of 2008 are already delinquent again. Many of these delinquencies will turn into foreclosures in the coming months.
"A lot of those modifications are simply pushing back principal payments," said Sam Khater, senior economist for First American CoreLogic, a financial data and analytics company. "They're not reducing the level of debt. Many homeowners are in such bad shape that only much more drastic or radical modifications will help them."
Simply put, it looks like more foreclosures are coming since many loan modification efforts are failing. The end result, Christmas break for foreclosures and back to reality for what will be a not so happy New Year for many.
Imagine faithfully paying your rent month after month, and then having a sheriff at your door telling you that your family has to leave - immediately.
While foreclosures have been hammering homeowners for months, they can be even more tragic for tenants in good standing who are blindsided when their landlord defaults on the mortgage.
Homeowners aren't the only ones losing their homes. This problem runs much deeper than people simply working hard and pulling themselves up from their bootstraps. Just because you're doing well, don't automatically assume that your success is the result of you working harder than everyone else. When you get sucker-punched there's not always much you can do.
A record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97%, the Mortgage Bankers Association said Friday.
That's a 76% increase from a year ago, according to the group's National Delinquency Survey.
At the same time, the number of homeowners falling behind on their mortgages rose to a record 6.99%, up from 5.59% a year ago, the association said.
This means that one in 10 borrowers in America are either delinquent or in foreclosure.
Many of those troubled borrowers are in California and Florida, which have among the highest delinquency rates in the nation.
It looks like the subprime is now beginning to taint prime:
The weakened economy and mounting job losses are expected to push these numbers even higher. And that will likely affect homeowners with prime, fixed-rate mortgages, which make up the vast majority of loans and have so far held up fairly well. Until now, much of the housing market's problems were concentrated in the subprime, adjustable-rate market, where homeowners with weak financial backgrounds got loans they ultimately couldn't afford.
"We have not gone into past recessions with the housing market as weak as it is now, so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past," said Jay Brinkmann, MBA's chief economist.
Who's feeling the pain?
California and Florida continue to have the country's highest rates of new foreclosures. These states have about 93,000 and 90,300 of the foreclosure starts in the quarter, respectively, according to the group. The next state, Illinois, is far behind with about 27,500 starts.
California and Florida also lead the nation in job losses, with the Golden State losing 101,300 positions over the past year and the Sunshine State shedding 156,200 jobs.
... Seven other states had rates of foreclosure starts that were above the national average for the quarter: Nevada, Arizona, Michigan, Rhode Island, Illinois, Indiana, and Ohio. But 20 states saw a decline in their foreclosure start rate, due to the moratoriums and modification efforts.
Subprime is really bad. Prime is bad and getting worse:
One in five subprime loans are now delinquent, crossing the 20% threshold for the first time, the group said. That level was up 3.72 percentage points from a year ago.
The number of prime loans past due also increased to 4.34%, up 1.22% from a year ago.
Essentially, the article concludes that this housing mess now comes down to one thing ... it's the economy stupid!
As reported by HOUSINGWIRE.com - "ING DIRECT Suspends Foreclosures":
Wilmington, Del. - based ING DIRECT, the nation's largest direct bank, said Monday morning that effective immediately, it will suspend foreclosure sales on occupied single-family properties through the end of March 2009. The company also said it would suspend all evictions on occupied single-family properties through Jan. 15, 2009, "in the spirit of the holidays," according to a press statement released by the firm.
The eviction freeze formalizes a previously informal, internal process, ING officials said. Eviction freezes are relatively common at most lenders, although many previously weren't publicized; although ING's eviction freeze is clearly much longer than similar freezes at other lenders. - (HOUSINGWIRE.com)
No surprise here as many banks have been doing so in recent days in coordination with their newly found loan modification programs.
If mortgage lending was the Wild West during the boom years, foreclosure-prevention counseling is the lucrative new frontier of the bust.
Nearly 1.6 million borrowers are in jeopardy of losing their homes this year, according to economist Mark Zandi of Moody's Economy.com, and thousands of new foreclosure-rescue companies are rushing in to offer the troubled homeowners loan work-out assistance. For a price.
They're looking for you:
Usually homeowners seeking mortgage modifications call their lenders directly or work with non-profit community groups. But many borrowers are now turning to for-profit companies as their mailboxes are flooded with work-out offers.
Each day private firms go online or visit courthouses across the country to pore over foreclosure filings, which are public records. "By 10 or 11 o'clock, they've mailed out solicitations to anyone with a foreclosure filing that day, promising to save their homes," says Jeff Hart, a prosecutor with the Ohio attorney general's office.
Once a borrower contacts a foreclosure-prevention company, the counselor takes their financial information, analyzes how much the client can afford, and then contacts the lender and negotiates new mortgage terms.
Look out, here comes the fraud:
"Folks need to be really careful," said Chris Kukla, a spokesman for the Center for Responsible Lending. "In many cases, these are no better than scams. You should look at all your low-price or free options before signing on with a for-profit company."
One of the main criticisms of for-profit foreclosure counselors is that they are not regulated, with oversight laws varying state by state. As a result, some marginal characters are drawn to the industry, ones who use high-pressure sales tactics and play on fear.
Many firms demand hefty up-front fees, which they keep even if a loan is not successfully modified. Only a dozen states, including Minnesota, New Jersey, New York, Nevada, Massachusetts and Maryland, prohibit that tactic.
As usual the markets are at work. Unfortunately, there's always an angle to be played when it comes to scam artists. As far as we're concerned, this housing market crisis is an endless playground that will enable these scam artists to take advantage of the most desperate individuals in their greatest time of need.
Guaranteed, people will be taken for a ride. Don't be one of them. It's always a few that make a bad name for the rest. Do your homework. Contact multiple experts. Get in the know.
The number of homeowners dealing with foreclosure is mounting. Nationwide, almost 766,000 homes received at least one foreclosure-related notice from July through September, according to Realty Trac. That's up 71% compared to the same time a year before.
Expect foreclosures to jump even more in Florida:
Expect already high foreclosure rates in Jacksonville, Naples and Miami to increase by 14% to 15% next year thanks to bottomless home prices and job loss.
"It's so far from recovery," says Doug Duncan, chief economist of Fannie Mae (nyse: FNM - news - people ). He says the ability to sell a home in the Sunshine State is not related to price, especially in the condo sector. "You can drop the price to zero and not sell a brand new property because there's no one there to buy it."
Bad in California too but, perhaps a light at the end of the tunnel:
It's not much better in California, home to five of the top 10 cities on our list, including Fresno, Santa Cruz, Merced and Santa Barbara. Here, foreclosures are expected to rise between 11% and 14% next year. Job growth figures are better than in Florida, and new housing permits have begun to bottom out, cutting into supply. Even though prices are down, transaction activity has surged 17% in San Diego, 21% in Los Angeles and 32% in Sacramento from last year, according to Radar Logic, a New York-based research firm.
"We're starting to see signs of a bottom in some places in California," says Scott Hoyt, a senior director of consumer economics at Moody's (nyse: MCO - news - people ) Economy.com. "Those places were the first places to crash. Now they're further into the foreclosure cycle. It looks like permit activity is starting to bottom out."
