Growth in foreclosure filings cools
Four of 10 problem states improve
By Inman News, Thursday, September 11, 2008.Foreclosure-related filings rose 12 percent from July to August and were up 27 percent from a year ago, according to data aggregator RealtyTrac.
RealtyTrac counted 303,879 foreclosure-related filings during August, the highest since it began issuing reports in January 2005. But the 27 percent year-over-year increase in foreclosure filings was less than seen in recent months, when it has ranged between 50 percent and 65 percent.
RealtyTrac, which sells information on distressed properties on a subscription basis to home buyers, investors and real estate agents, said part of the reason for the smaller increase was a spike in foreclosure activity a year ago.
"The lower annual percentage increase this month is due to a big spike in activity last August -- particularly in default activity," said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. "Over the past few months we've seen annual increases in default activity and auction activity moderating, and that trend continued in August, with default activity up just 10 percent from a year ago and auction activity up 7 percent from a year ago."
Saccacio thinks legislation passed by several states to give troubled borrowers more time before foreclosure proceedings are initiated could be one reason for the smaller increases in default and auction activity. Loan servicing guidelines that encourage workouts and short sales as alternatives to foreclosure could also be a factor, he said. Either way, those measures may only delay, rather than prevent, some foreclosures.
Not all properties that are subjected to foreclosure-related filings end up being repossesed or sold. In addition to tracking real estate-owned properties that are foreclosed on and repurchased by banks, RealtyTrac tallies notices of default and lis pendens filed when borrowers are far behind on their payments, and notices of foreclosure sales.
The 303,879 foreclosure-related filings in August included 119,059 notices of default and lis pendens, 93,927 notices of foreclosure or trustee sales, and 90,893 homes that became real estate-owned propertes.
Nevada, California, Arizona and Florida had the highest foreclosure rates, with California accounting for one-third of foreclosure activity. Among the 10 states with the highest foreclosure rates, four saw a decrease in the rate of filings per household from the previous month: Florida, Georgia, Ohio and Colorado.
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Submitted by Joe Manausa on September 12, 2008 - 4:21am.
In the article, you write "Loan servicing guidelines that encourage workouts and short sales as alternatives to foreclosure could also be a factor, he said. Either way, those measures may only delay, rather than prevent, some foreclosures."
I think this is "spot on" as anything short of a short sale is most likely only going to be a delaying tactic. I know we are seeing a lot of short sales now in the Tallahassee Real Estate Market .
Keep up the great work!
Submitted by Glenn Ginsburg on September 12, 2008 - 4:56am.
Increases or decreases by percentages can be misleading versus the absolute numbers.
It is unfortunate that some lenders tell people that know they are having financial situations beyond their control (loss of job), they can only talk to them after they have missed two months of payments. After two months of payments they will probably receive a lis pendens within one or two more months. So lenders are forcing the issue with lis pendens situations as well as hurting the credit scores of the individual - this is not good.
Joe - I would be interested to know if you are seeing the smaller lenders approving a short sale or the larger lenders.
Also, how long some of the potential short sales have been in the pipeline.
Glenn Ginsburg
Naples Florida | Pelican Marsh Real Estate
Submitted by Wenceslao Fernandez Jr, BS, Realtor, CDPE on September 12, 2008 - 10:00am.
There are several options for home owners to avoid foreclosure. These may include deferrement, modification and refinance to name a few.
With some homeowners taking advantage of FHA loans in order to get out from under adjusting or recasting loans, while others may reach other work-out agreements, it is possible these activities have helped curtail the damage.
However, it is also true that short sales have become one of the only ways homeowners can get from under a foreclosure situation.
The approval of a short sale is almost entirely dependent on how it is presented and handled. I would encourage sellers to seek the expert advise of professionals in the business who are not only active Realtors (not all real estate agents are Realtors - members of the National Association of Realtors who adhere to their strict Code of Ethics), but also Certified Distressed Property Experts (CDPE).
These specialized agents are better prepared to handle transactions of a distressed nature than their counterparts.
Obviously, an orthopedic doctor is not a heart specialist doctor and a heart specialist may not be a heart surgeon. Although all doctors, their level of expertese is greatly linked to their specialized and/or additional training.
Active, professional Realtors who are CDPEs are by virtue of their training, typically better prepared to put together and help the buyer and/or seller navigate through the process of properly presenting an offer to a bank to obtain a short sale approval or to purchase an REO from their books.
Remember, luck is when preparation meets opportunity. Lack of luck may therefore be the result of poor preparation. Hiring the right agent for the job of buying or selling a home is then paramount in increasing the odds to what some may consider a lucky outcome.
www.MiamiRealEstateKing.com
Certified Distressed Property Expert
Miami-Dade County, Florida.
Submitted by Michael LittleBig on September 12, 2008 - 6:25pm.
I sometimes wonder when you read that the foreclosures are up or down if we realize that each foreclosure is a person who was a homeowner that lost his house and became a credit untouchable and a third class citizen.
As I read, there are 4 million foreclosures projected by year end 2008,and 6 million total by year end 2009.
As I understand and read probably most of them or all of them had no rights to contest, object or to fight their foreclosure. For a fact, if your were a federal mortgage savings bank borrower you had no rights since the Congress has not passed any Federal Consumer Banking Regulations. I would venture to say that the foreclosure proceedings in this country as practiced would be equal to the Lynch Mob Theory. Banks foreclose the mortgage and hang the borrower.
What about all the houses standing vacant and unsold. The hype is to buy those foreclosures now. To my way of thinking, it is kind of like a vulture picking the meat of the bones of a dead cow lying in the field...
Sounds crude doesn’t it? That isn’t as crude as the bank that held the mortgage and would not negotiate with the borrower.
Is the Bank required to negotiate with the borrower, No.
Is the bank required to do mitigation, No.
Can the Bank write off the Foreclosure loss, Yes.
Are some banks insured against that type of loss, Yes.
Does the Bank an accounting entry for reserves for loan losses, Yes.
Were not some of these banks reporting profits in the billions, absolutely, National City Bank Cleveland Ohio is a good example.
You see there is more to this story than is being told. It starts with a simple mortgage loan transaction, a lender and a borrower. The bank makes rules, creates their own paper work and enforces the covenants. The Banks operate with impunity. The Banks have no fear of a borrower, because they have no rights. Did all the foreclosure borrowers default, yes they did. Did they all default for the same reason, no they did not.
The problem is that the borrower has no rights to legally tell his side of the story within the same system that the Bank lends their mortgage money. Can Congress make a Federal Bank talk with their borrower, No. Congress has passed operating regulations through their regulators but the regulations are interpreted at the discretion of the Banks management.
The point is 4 million borrowers with no rights to defend themselves. (Hire an attorney, please.please, that is called the legal dance. This is where the Borrower and the Banks attorneys dance before the Court until the borrowers money runs out).
This housing meltdown is going to continue until The Congress levels the playing field for the borrower. What about the borrowers who are underwater (owe more on the house that it’s worth.) Are those homeowners candidates for foreclosure, yes they are.
Lets be honest, the banks took that simple mortgage transaction, and created a financial nightmare for the American public through creative financial manipulation of securitization for sale and then blamed the homeowner. All the current legislation (housing bill, nationalization of Freddie and Fannie, the Fed’s Bear Stearns deal) have protected everyone but the homeowner.
Think about it, 4 million Americans with no rights, lost their home and then their credit bureau tells their prospective landlord that they have a foreclosure on their credit record which means, don’t rent to these people.
And the Banks go on about their mortgage business tightening their standards. The Banks should tighten their business morals and principals.
The foreclosures in my humble opinion will go on for a long time. The problems that the banks and other financial institutions created with their greed are very complex and intertwined through the American economy with other forms of credit. Even Congress through their lack of solutions is signaling the complexity of this crisis. As a society we have a very serious problem.
At this point in time there is no defined leadership to produce the solutions to this housing crisis.
4 million foreclosed homeowners with no voice. Their silence is deafening. I cannot speak for all of them.I am one of them.
Michael LittleBig
POB 16588
Rock River OH 44116-0588
9-12-08