California, Florida drive record foreclosures
FDIC warns of more bank failures
By Inman News, Friday, September 5, 2008.The percentage of homes in the foreclosure process hit a new record in the second quarter, and homes continued to enter the foreclosure process at a record rate, the Mortgage Bankers Association said today.
In looking at the nation as a whole, a majority of states saw little change, but increases in foreclosures in California and Florida outweighed improvements in states such as Texas, Massachusetts and Maryland, said MBA chief economist Jay Brinkmann.
The percentage of loans in the foreclosure process at the end of the second quarter was 2.75 percent, compared with 2.47 percent in the first quarter and 1.4 percent a year ago.
The percentage of loans on which foreclosure actions were started hit 1.08 percent, up from 1.01 percent last quarter and 0.59 percent a year ago.
With California and Florida accounting for 39 percent of all foreclosures starts, and 73 percent of the increase in foreclosures between the first and second quarters, it's "somewhat meaningless" to look for a national bottom, Brinkmann said.
Michigan, one of the hardest-hit markets in the country, has now gone three quarters with little to no increase in its rate of foreclosures, he said. Massachusetts showed a very large drop in foreclosure starts, perhaps signaling a bottom.
But "because of the sheer size of California and Florida, an improvement in the national numbers, whether delinquencies, home prices or any other measure, is unlikely until we see some turnaround in those two states," Brinkmann said.
Addressing the Florida Bankers Association Thursday, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said bankers "simply must accept that the credit downturn is far from over. It's a tough slog, but there's no easy way out."
Bair said 10 banks have failed this year and more are expected to, which could force the FDIC to raise premiums to boost reserves (see story). Defaults are rising across all types of loans, with residential mortgage loans accounting for the largest share of the increase in the second quarter, Bair said.
The MBA said the delinquency rate for all residential mortgage loans stood at 6.41 percent at the end of the second quarter, compared with 6.35 percent in the first quarter and 5.12 percent a year ago on a seasonally adjusted basis. The delinquency rate for prime loans climbed to 3.93 percent, while the delinquency rate for subprime loans fell slightly to 18.67 percent.
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Submitted by Mott Marvin Kornicki on September 5, 2008 - 3:06pm.
California and Florida are possibly the two most desirable state in which to live in the USA. The climate, conditions and quality of life are excellent.
It comes as no surprize that many property owners over extend themselves in order to "Live the Good Life".
Here in Miami and especially Aventura, Sunny Isles Beach and the neighboring communities- I have seen an increase in mortgage defaults.
Foreclosures and Short-Sales are becoming common-place and setting the new market values.
It is the BUYER that creates the market and sets the selling price.
From reading other articles here on Inman- I understand that Miami has a 5 year supply of new condominiums.
Mott Marvin Kornicki, Broker/Associate
SIB REALTY, LLC • Sunny Isles Beach Realty
www.WaterwayRealty.com
www.SunnyIslesBeachHouse.com
www.BalHarbourHouse.com
www.WinstonTowersSunnyIslesBeach.com
305.935.3533 Main Line
Submitted by Richard Greenwood on September 5, 2008 - 3:33pm.
We are now in the midst of the "Great Correction"...
the most significant economic event since the Great Depression.
You'll find information for better decision making at... http://TheGreatCorrection.com
Submitted by Steve Simon on September 6, 2008 - 4:03am.
If you read my blog (link to the blog is on my home page at the Florida real estate School), you will see that for many months I have been posting that all that said the downturn was over had "No Clue" as to what was really happening.
I will not rehash all, but suffice to say there has been no change because there has been no incentive for change...
No major improvement can occur without a change in mindest adn that would be tied to the glut of supply coupled with the contuing addition to the supply from foreclosure (all while the tightening takes place in the lending industry).
The lenders, coupled with the appraisers created this! The real estate agent was doing their job. The buyer investor was reaching for the stars (that is what some investors do). It was the responsibility of the appraisers and lenders to value objectively, and lend with restraint; neither was done!
Read my post on what an "Air Loan" is and you'll get the idea of just how bad these two professions performed...
Just my thoughts :)
If the answer to a complex problem is very simple, it is usually incomplete...
Steve Simon is the lead instructor at the Steve Simon School of Real Estate www.stevesimon.us
Submitted by kali chism on September 25, 2008 - 1:35pm.
I read a book called “Mortgage Meltdown” and it really helped me understand that I’m not the only one going through this. I was also able to apply for a grant from a non-profit to help me with my mortgage. I think anyone who is trying to save his or her home, like me, should read this. Go to www.48grant.com