Here There and Everywhere

Expat wanderer

Not Good News: More Foreclosures in USA

U.S. home foreclosures set another record in July

Thu Aug 13, 2009 12:11am Reuters

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By Lynn Adler

NEW YORK (Reuters) – U.S. home loans failed at a record pace in July despite ongoing federal and state programs to avoid foreclosures, which have severely strained housing and the economy.

Foreclosure activity jumped 7 percent in July from June and 32 percent from a year earlier as one in every 355 households with a loan got a foreclosure filing, RealtyTrac said on Thursday.

Filings — including notices of default, auction and bank repossession — have escalated with unemployment.

“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” James J. Saccacio, RealtyTrac’s chief executive, said in a statement.

“Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”

More than 360,000 households with loans drew a foreclosure filing in July, a record dating back to January 2005, when RealtyTrac started tracking monthly activity.

Notices of default, auction or repossession have reached nearly 2.3 million in the first seven months of the year — with more than half a million bank repossessions, the Irvine, California-based company said.

Making timely payments keeps getting more harder for borrowers who have lost their jobs or seen their wages cut.

The unemployment rate is 9.4 percent and President Barack Obama has said he expects it will hit 10 percent.

Obama’s housing rescue is gaining traction in altering terms of loans for struggling borrowers, but slowly.

Earlier this month the U.S. Treasury Department detailed the progress of the top servicers in modifying loans and prodded them to step up efforts to stem foreclosures.

SUN BELT STILL SUFFERING

States where sales and prices surged most in the five-year housing boom early this decade remain hardest hit.

California, Florida, Arizona, Nevada accounted for almost 57 percent of total U.S. foreclosure activity in July.

Illinois had the fifth-highest total filings, spiking nearly 35 percent from June, in an example of how moratoriums often delay rather than cure an inevitable loan failure.

Default notices spiked by 86 percent in July, from artificially low levels the prior two months. A state law enacted on April 5 gave delinquent borrowers up to 90 extra days before foreclosure started, RealtyTrac said.

Michigan’s foreclosure activity fell 39 percent in July from June, mostly due to a 66 percent drop in scheduled auctions. A state law that took effect July 6 freezes foreclosure proceedings an extra 90 days for homeowners who commit to work on a loan modification plan.

Other states with the highest foreclosure filing totals last month included Texas, Georgia, Ohio and New Jersey.

Nevada had the highest state foreclosure rate for the 31st straight month, with one in every 56 properties getting a filing, or more than six times the national average.

Initial notices of default fell 18 percent in the month, with a new Nevada law taking effect on July 1 requiring lenders to offer mediation to homeowners facing foreclosure. Scheduled auctions and bank repossessions each jumped more than 20 percent, however, boosting overall foreclosure activity in the state by 4 percent from June.

California, Arizona, Florida, Utah, Idaho, Georgia, Illinois, Colorado and Oregon were the other states with the highest foreclosure rates.

(Editing by Kenneth Barry)

Things are turning around in the USA, but these foreclosures were already in the pipeline, and more are coming due principally to people borrowing more money than they could really afford, and people who have lost jobs and can no longer pay their mortgage.

Now I am going to sound like your MOTHER: Do not take an adjustable rate mortgage. Fix your credit, get a good score, and take the very best 15 or 30 year FIXED mortgage you can get, and before you buy, make sure that you figure taxes and insurance as well as the monthly mortgage and interest when figuring your monthly payment. Make sure you can still eat, and have a little left over for emergency car repairs. It is so much better to live in a house that you can afford than to lose everything you have invested in a house you can’t afford.

If you get into trouble, talk to your lender right away. Lenders do not want to foreclose; it is in their interest as well as your own to find a way to allow you to reduce payments for a while to keep the relationship on track. There is some flexibility. Negotiate.

August 13, 2009 - Posted by | Family Issues, Generational, Interconnected, Living Conditions, News, Shopping, Social Issues, Statistics, Values, Work Related Issues

9 Comments »

  1. Intlxpatr ;
    Who is making benefit from all those foreclosed houses ? Who is buying the homes offered or are they not moving yet and the prices keep sliding .

    Comment by daggero | August 13, 2009 | Reply

  2. Bingo, Daggero. Many of them are just sitting there – the bank can’t sell them for less than is owed on the mortgage, and the mortgage is more than the house is worth in today’s market, so they sit there, overpriced and unwanted. The sheer numbers of houses available depress the market, but foreclosures are sometimes less well cared for, and with no electricity and water, hard to keep clean, hard to show. I looked at one – they are sold “as is” but you don’t know what the “as is” is without water and electricity. It was a gorgeous house, well below it’s market value, but who knew what the problems were?

    Comment by intlxpatr | August 14, 2009 | Reply

  3. That’s not complete bad news, foreclosures are also o good way to move the economy.

    Comment by Zachary Smith | August 17, 2009 | Reply

  4. Like i read in many blogs, this crisis is gonna worse before it ends.

    Comment by Alexander Willians | August 17, 2009 | Reply

  5. Kuwait finanace house KFH has just signed a deal with an american real estate company UDR worth $450 million to invest in buying distressed houses and real estate in the USA .
    Dont let that dream house slipaway Intlexpatr 🙂

    Comment by daggero | August 17, 2009 | Reply

  6. I can see that they are good for your business, Zachary.

    And yours, Alexander

    Good information, Daggero. There are a lot of people ready to jump in at the bottom of the market, and I think the bottom is coming. I am looking at a house, but I will have it carefully inspected – I never fall in love without checking it out 😉

    Comment by intlxpatr | August 18, 2009 | Reply

  7. We’re feeling it out here in California. It’s rough for sellers; lenders are still continuing to “threaten” to go after the home owner for the deficiency judgment even though they opt for a non-judicial foreclosure (most common in California). It’s a great time for buyers. If you’re waiting for the bottom to fall out, you may miss the boat.

    Comment by ca foreclosure | August 26, 2009 | Reply

  8. You may be right, CA, and I may have just missed the bottom, but I think this is a small surge of optimism lifting the market right now; I think it is going to bottom out this winter and start back up – very slowly – in the spring. I think a part of it is demographics – big baby boomer generation downsizing, retiring, unable to afford what they once could.

    Comment by intlxpatr | August 26, 2009 | Reply

  9. […] U.S. home foreclosures set another record in July Good news story… Not Good News: More Foreclosures in USA Here There and Everywhere […]

    Pingback by U.S. home foreclosures set another record in July - Loan Modification Forum - LoanSafe.org | August 27, 2009 | Reply


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