•Foreclosure Filings in U.S. Increase to Record 1.5 Million in First Half

Discussion in 'Economics' started by ByLoSellHi, Jul 16, 2009.

  1. More 'Green Shoots!'

    We're going to see strong growth as the unemployment rate skyrockets along with foreclosure rates (hard to believe they're getting actually worse), and Dennis Kneale is a genius for calling an end to the recession.

    After all, jobs and the ability to keep one's home don't matter to most Americans, let alone wages or a myriad of other adverse factors working against them as they fight for survival.

    Oh, and businesses don't need those Americans to come and spend dollars in their establishments for things to get better.

    Yes sir, I see 3-5% growth in the near term, and 5%+ growth soon thereafter, as the recession is over.



    U.S. Foreclosure Filings Hit Record 1.5 Million in First Half
    Share | Email | Print | A A A

    By Dan Levy

    July 16 (Bloomberg) --
    U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc.

    More than 1.5 million properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said today in a statement. That’s a 15 percent increase from the year earlier. One in 84 U.S. households received a filing.

    “People are losing their jobs, seeing their income go down and are underwater on their mortgage,” Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. “It’s a toxic combination.”

    Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, according to the S&P/Case-Shiller index. The unemployment rate rose to 9.5 percent in June, the highest since 1983, bringing the total number of lost jobs to about 6.5 million since the recession started in December 2007, the Labor Department said.

    Defaults by subprime borrowers with poor credit histories spurred the housing recession and spread to prime borrowers as home prices and sales declined. The Mortgage Bankers Association said May 28 that prime fixed-rate home loans to the most creditworthy borrowers accounted for 29 percent of new foreclosures in the first quarter, the biggest share of any type of loan.

    One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said.

    California, Florida Lead

    Twenty of the 50 U.S. counties with the highest foreclosure rates were in California and 12 were in Florida, RealtyTrac said.

    Clark County, Nevada, home to Las Vegas, had the highest rate in the nation with one in 13 households receiving a filing, according to RealtyTrac.

    “I don’t see any turning of the tide,” said Donald Haurin, an economics professor at Ohio State University in Columbus. “The effect of more foreclosures will be continued downward pressure on house prices, and lead to difficulty making mortgage payments that are continuing to reset.”

    Payment-option adjustable rate mortgages will contribute to higher defaults, said Rick Sharga, executive vice president of RealtyTrac. Option ARMs allow borrowers to pay less than the interest they owe each month, tacking on the difference to their total debt and creating the potential for bigger bills in the future.

    Option ARMs

    About three quarters of those loans will adjust to require higher payments next year and in 2011, with the peak coming in August 2011 when about 54,000 loans recast, according to data from First American CoreLogic of Santa Ana, California.

    Government and lender-supported plans to help troubled homeowners -- including President Barack Obama’s $275 billion pledge to jumpstart sales and encourage banks to modify sour loans -- have had little effect, Haurin said.

    As many as 3.2 million U.S. households will get a foreclosure filing by the end of the year, Sharga said.

    “Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue,” James Saccacio, RealtyTrac’s chief executive officer, said in the statement.

    More than 8.3 million U.S. mortgage holders owed more than their homes were worth and an additional 2.2 million borrowers will be “underwater” on their loans if prices decline another 5 percent, First American said March 4.

    Nevada, Arizona

    Foreclosure filings in the second quarter totaled a record 889,829, up 11 percent from the first quarter and up 20 percent from a year earlier, RealtyTrac said. June filings were 336,173, the third highest monthly total in records going back to January 2005.

    Nevada had the highest foreclosure rate in the first half, with one in every 16 households receiving a filing, RealtyTrac said. A total of 68,708 properties were affected, 61 percent more than in the first half of 2008.

    Arizona had the second highest rate, one in 30 households; Florida was third at one in 33; and California ranked fourth at one in 34. Other states in the top 10 included Utah, Georgia, Michigan, Illinois, Idaho and Colorado.

    Top 10 States

    California led in total filings with 391,611, an increase of 15 percent from a year earlier; followed by Florida at 268,064 for a 42 percent increase, RealtyTrac said. Arizona was third with 89,799 filings, up 55 percent, and Illinois was fourth with 68,932, up 29 percent.

    Other states in the top 10 for their sheer number of foreclosures and defaults were Nevada, Michigan, Ohio, Georgia, Texas and Virginia, said RealtyTrac, which collects data from more than 2,200 counties representing 90 percent of the U.S. population.

    To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net
    Last Updated: July 16, 2009 00:00 EDT
  2. MattF


    Welcome to the new club!
  3. But a bunch of people in 'the eternal optimists' club' on ET say this is irrelevant; another 'lagging indicator.'

    Some of these same people were calling for a housing bottom in 2008, and a foreclosure bottom the same year. Where is it?

    We could be at 15% unemployment, which I believe we will be at or very near in 18-24 months, and they'll still be talking about unemployment as a lagging indicator.

    We could see 1 in 6, rather than 1 in 8 Americans late on their mortgage payments, and they'll say this is a 'lagging statistic.'

    The 'optimists' club'....
  4. For Landis, resident whining bitch of ET, with a gift bag of pamprin, kotex and vagisil. Feel better, cupcake! [​IMG]

    * JULY 16, 2009, 12:00 A.M. ET

    US Foreclosures Continue Shattering Records: RealtyTrac

    By Dawn Wotapka

    NEW YORK (Dow Jones)--
    National foreclosure filings in the U.S. continue shattering records, propelled by mounting unemployment and continued erosion of home values.

    Filings were reported on more than 336,000 properties in June, the fourth-straight month to see the total topping 300,000, according to RealtyTrac's latest foreclosure report released Thursday. That helped boost the second-quarter's tally by 20% from the year-earlier period, making it the highest quarterly total since the report's first-quarter 2005 launch. When counting this year's first half, one in every 84 homes was slapped with at least one filing, ranging from default notices to bank repossessions.

    It's just more bad news as the limping real-estate market struggles for stability. Foreclosures can command discounts as high as 60%, a drag on surrounding home prices and appraisal values. The data also show that the government's frantic efforts to keep Americans in their homes haven't been completely effective, and moratoria crafted to slow foreclosures seem to simply delay the pain. Even worse, with unemployment at a rate not seen in a quarter century, there's no relief in sight.

    "In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels," said James J. Saccacio, RealtyTrac's chief executive. "Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes are now worth represent a potentially significant future risk."

    Moody's Economy.com estimates 15 million homeowners owe more on their mortgages than their houses are worth. Barclays Capital, meanwhile, estimates new foreclosures started this year at 3.0 million, with 2.6 million expected in 2010.

    While not every filing ends with repossession, RealtyTrac's closely watched and frequently cited report, which uses data collected from more than 2,200 counties nationwide, highlights the nation's most troubled regions.

    The boom-to-bust markets continue their domination. In the year's first half, Nevada claimed the top spot, with one in every 16 units receiving at least one filing, a 61% jolt from a year earlier. Arizona followed with one in 30, while Florida came in with one in 33. For June, the top trio were Nevada, depressed by Las Vegas - California, hurt by the Inland Empire region - and Arizona, dragged down by Phoenix.

    There is a silver lining: According to the National Association of Realtors, foreclosures and other distressed deals make up about one-third of existing home sales.

    -By Dawn Wotapka, Dow Jones Newswires; 212-416-2193; dawn.wotapka@dowjones.com
  5. I always thought it was the person signing the mortgage note whose responsibility it was to keep themselves in their homes.

    I must be quaint.

    Still, this affirms that things are getting worse, and not stabilizing, as Kudlow & Kneale (the brilliant economist that Dennis Kneale is) would like the sheeple to believe.

    •Bankers, Lawmakers Assail Pace of U.S. Programs to Keep Americans in Homes

  6. dpt444


    Good indication of still a down side to come. We still have a ways down to go on the DOW and these current levels will not last for long as the foreclosures, layoffs, defaults increase over the next coming months. Just the beginning of what's coming... back to trading.