LOS ANGELES (AP) -- A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report. RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009. More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said. [full story]
This news is pretty much worthless to these markets. No matter what the foreclosure rate moving forward is the markets don't care, the only time this news will be market moving news is when the foreclosure rate starts to come down substantially. There could be 20 million more foreclosures and the market would still push the negatives aside.
I agree with S2007S, this is old news. These are the homes that Obama bailed out several months back with his 80 billion dollar âsave the homes packageâ. Most of these people could not meet their new mortgages and are in foreclosure again. This was expected to happen. Banks are finally caught up from the original mortgage foreclosure deluge. Now they want as many of these off of their books as they can get so they donât have to pay the taxes on them. Also they can then look good financially and go to Wall Street and sell more stock.
Apparently the stock market doesn't care, but what about the housing market? Do you agree with the assessment that was headlined on MSN.com that the housing market is poised for a turnaround? (obviously it depends on the region, but in the worst places I don't think a housing recovery is close.) Also this line from the article stuck me: "California accounted for the biggest slice overall of homes facing foreclosure â roughly 23 percent of the nation's total. ONE IN EVERY 62 properties received a foreclosure filing in the first quarter."
This is bullish. Because it increases the velocity of money as less people spend money servicing huge mortgage debts putting a big damper in the economy. The reason for this is all that money that was going to the banks was being hoarded and not used in productive ways. Money spent locally instead increases jobs over time.
Great point, the Obama administration should just pass a law canceling all mortgages that way every homeowner can spend more of their income and not waste it by sending in those pesky mortgage payments. Just think of the immediate stimulus effect it will have!