Whalen: Foreclosure Peak Still Ahead for US
By Greg Brown and Kathleen Walter
The foreclosure crisis will peak sometime next year, causing the economy to struggle to stay in positive territory, pressuring California and other states into default, and likely triggering the restructuring of an “insolvent” Bank of America, predicts banking analyst Christopher Whalen.
Whalen says that the data and discussions regarding earnings on bank conference calls lead him to believe that the housing problem is still very much ahead of us. One of the founders of Institutional Risk Analytics, Whalen just published a new book, “Inflated: How Money and Debt Built the American Dream.”
“It’s going to peak next year. We’re not nearly a third of the way through the backlog of foreclosures, in part because the banks, operationally, just couldn’t deal with it,” Whalen said.
Chris Whalen editor of The Institutional Risk Analyst a weekly commentary on the institutions and financial markets that comprise the global political economy
It takes a year for a foreclosed home to work its way through the entire legal process. That means much of the foreclosures making headlines now will not be completed until well into 2011 and perhaps 2012, Whalen said.
Major banks are just now talking about how to add operational capacity to handle the work to come, he said.
“My big concern is that by next year most of the home sales in the United States are going to be involuntary, they’re going to be the result of foreclosures,” Whalen said. “This is going to pull down all the comparable prices for homes that are still performing.”
If that happens, expect the impact on property-tax collection to exacerbate the risk of default among major states, including California, New York, and Illinois.
State spending on pensions and other mandates is going up while revenues are going down or are flat, Whalen said. Sales taxes and property taxes are the two major sources of revenue for a state like California.
“What if we have a down economy next year and we have down real-estate prices? I think you’re going to see a situation where the accumulation of foreclosures is going to start hurting property-tax revenues for cities and counties, and that is going to just snowball,” Whalen said.
As a result of slowing growth and problems like delayed property-tax payments, coupled with a lack of political will to cut spending, Whalen expects a series of sovereign defaults or near defaults in Europe and in the United States.
Whalen said that the United States is living through both inflation and deflation, where real growth isn't happening but prices are rising at the grocery store just the same.
“While we had nominal growth for the last 20 years, for example, we’re not keeping up in real terms,” Whalen said, that is, adjusted for inflation.
As long as foreclosures are a problem, it will be hard for the United States to post positive growth, Whalen said.
Meanwhile, thanks to the foreclosure problem on top of other liabilities, Bank of America is likely to be restructured, wiping out its bondholders, Whalen said.
“I think Bank of America is going to have to be restructured. I think the bondholders at Bank of America, specifically, are going to have to be compelled to convert into equity,” Whalen said.
Bank of America has told the United States that is has completed repayment of its $45 billion bailout under the much-maligned TARP program, reports the Financial Times.
The bank said it was able to raise $3 billion in capital through asset sales, the newspaper reported.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
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Thursday, December 9, 2010
Tuesday, November 30, 2010
14 Million Borrowers are underwater!
According to a Pew Research Center survey, 36% of Americans said it is acceptable to stop making mortgage payments, even if it is affordable.
Pew surveyed more than 2,900 adults on the subject of strategic default. More than one-in-five, 21%, said they owe more on their mortgage than their home is worth. These underwater borrowers are at the highest risk of strategically defaulting, because they lack the incentive to make the payments.
According to Deutche Bank, 14 million borrowers were underwater as of the first quarter of 2010, but with another 10.8% decline in house prices expected, another 6 million could slip into negative equity as well.
The problem has grown so dire Fannie Mae is suing some homeowners it believes strategically default on the mortgage.
Some programs such as the Federal Housing Administration's Short Refinancing program launched last week, and the RH program are attempts to help borrowers in this situation.
Nearly half of homeowners said the value of their home declined during the recession, but these borrowers are not more tolerant of strategic default than those in positive equity. According to Pew, 18% of underwater homeowners said it's acceptable to walk away, while 17% of respondents still with equity in their home approved of the practice.
Those who aligned themselves with the Democratic party were twice as likely to accept strategic default, at 23% compared to 11% of Republicans.
"Caught between big mortgages, sinking home values and the financial strains associated with periods of high unemployment, many homeowners have stopped making mortgage payments and opted to 'walk away' from their loans and their homes," according to Pew.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
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502-969-1801
Pew surveyed more than 2,900 adults on the subject of strategic default. More than one-in-five, 21%, said they owe more on their mortgage than their home is worth. These underwater borrowers are at the highest risk of strategically defaulting, because they lack the incentive to make the payments.
According to Deutche Bank, 14 million borrowers were underwater as of the first quarter of 2010, but with another 10.8% decline in house prices expected, another 6 million could slip into negative equity as well.
The problem has grown so dire Fannie Mae is suing some homeowners it believes strategically default on the mortgage.
Some programs such as the Federal Housing Administration's Short Refinancing program launched last week, and the RH program are attempts to help borrowers in this situation.
Nearly half of homeowners said the value of their home declined during the recession, but these borrowers are not more tolerant of strategic default than those in positive equity. According to Pew, 18% of underwater homeowners said it's acceptable to walk away, while 17% of respondents still with equity in their home approved of the practice.
Those who aligned themselves with the Democratic party were twice as likely to accept strategic default, at 23% compared to 11% of Republicans.
"Caught between big mortgages, sinking home values and the financial strains associated with periods of high unemployment, many homeowners have stopped making mortgage payments and opted to 'walk away' from their loans and their homes," according to Pew.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Saturday, November 27, 2010
Foreclosure Inventories up for Banks
JACKSONVILLE, Fla. – November 23, 2010 – The October Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS) shows that accelerated foreclosure referral activity over the last several months has pushed the foreclosure inventory rate to all-time highs. As of the end of October 2010, foreclosure inventories are 7.4 times historical averages and rising.
The report also shows that foreclosure sales decreased dramatically over the last month as a result of the widespread moratoria. Overall, the percentage of loans moving from the foreclosure process to bank-owned status (or other involuntary liquidation) dropped by 35% in October. The moratoria contributed to further timeline extensions, as the average number of days past delinquent for loans in the foreclosure process approaches 500.
As foreclosure activity increases, more 6- and 12-month delinquent loans are moving to foreclosure, but the extremely delinquent category (more than 12 months) continues to grow and age. A payment has not been made in more than year on almost one-third of all loans that are 90 or more days delinquent. And, of loans that have not made a payment in two years, more than 18% are still not in foreclosure.
In the month of October, 263,000 loans entered the foreclosure process, which represents a 4.4% month-over-month decline. Total inventory of foreclosures is nearly 2.1 million loans with another 2.2 million loans in the “greater than 90-days delinquent, but not yet in foreclosure” status. While delinquencies remain elevated – currently registering at 2.7 times historical averages – an ever-growing number of new 60-day delinquencies are re-defaults of loans that had previously been 60-days or more delinquent, and had become current. The number of “first-time” troubled loans, however, remained relatively stable during the last several months.
As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 9.29 percent
Total U.S. foreclosure inventory rate: 3.92 percent
Total U.S. non-current* loan rate: 13.20 percent
States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, Louisiana
States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Note: Totals based on LPS Applied Analytics’ loan-level database of mortgage assets and are extrapolated to represent the industry.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
The report also shows that foreclosure sales decreased dramatically over the last month as a result of the widespread moratoria. Overall, the percentage of loans moving from the foreclosure process to bank-owned status (or other involuntary liquidation) dropped by 35% in October. The moratoria contributed to further timeline extensions, as the average number of days past delinquent for loans in the foreclosure process approaches 500.
As foreclosure activity increases, more 6- and 12-month delinquent loans are moving to foreclosure, but the extremely delinquent category (more than 12 months) continues to grow and age. A payment has not been made in more than year on almost one-third of all loans that are 90 or more days delinquent. And, of loans that have not made a payment in two years, more than 18% are still not in foreclosure.
In the month of October, 263,000 loans entered the foreclosure process, which represents a 4.4% month-over-month decline. Total inventory of foreclosures is nearly 2.1 million loans with another 2.2 million loans in the “greater than 90-days delinquent, but not yet in foreclosure” status. While delinquencies remain elevated – currently registering at 2.7 times historical averages – an ever-growing number of new 60-day delinquencies are re-defaults of loans that had previously been 60-days or more delinquent, and had become current. The number of “first-time” troubled loans, however, remained relatively stable during the last several months.
As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 9.29 percent
Total U.S. foreclosure inventory rate: 3.92 percent
Total U.S. non-current* loan rate: 13.20 percent
States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, Louisiana
States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Note: Totals based on LPS Applied Analytics’ loan-level database of mortgage assets and are extrapolated to represent the industry.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Tuesday, November 23, 2010
Foreclosures Freeze Hurts Home Prices
Integrated Asset Services (IAS) has shown that there has been a reduction of 0.2% in the price of residential property during the third quarter of the present year. In context of a general slowdown of U.S. economy, the figures indicate difficult times for home sales in coming months.
According to IAS 360 HPI (house price index) statistics home prices have shown a positive growth of 1.6% in the North Eastern regions of US due to independent gains in Washington D.C. and New York. As compared to this positive trend the prices in other regions witnessed a fall. In South HPI fell by 0.4%, in West it went down by 0.5% while in Midwest it plunged by 1.4%. However the hardest hit region was Las Vegas which experienced a decline of 27.6%. IAS has described this as the poorest performing region of US in quarter 03.
There are counties where home prices have fallen by as high as 50% over the last three years, according to IAS reports. Monterey County in California is the worst affected with home prices sliding down 41% over last year’s prices coupled with an additional fall of 3.8% in 3rd quarter of this year. Florida Lee County closely follows with a decline of 39% in the corresponding period with an added decline of 4.3% in Q3 of this year.
Ryan Tomazin, IAS president has reported that the housing crisis is yet from over as is reflected by data collected over the last year. According to him though the worst phase is over, it would take some more time for home prices to recover in view of the overall slow economic growth in United States. The president of this Denver based company was speaking on the revival of housing market. The trouble was compounded by robo-signing controversy investigations initiated by state attorneys general and federal officials.
Apprehensions arise because these investigations could result in slowing down of housing market caused by holding back of foreclosures by banks. As per statement issued by IAS, lesser foreclosures lead to fewer numbers of homes available for sale in the market thereby attracting few investors. Tomazin has rightly commented that the housing market is very fragile at this moment.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
According to IAS 360 HPI (house price index) statistics home prices have shown a positive growth of 1.6% in the North Eastern regions of US due to independent gains in Washington D.C. and New York. As compared to this positive trend the prices in other regions witnessed a fall. In South HPI fell by 0.4%, in West it went down by 0.5% while in Midwest it plunged by 1.4%. However the hardest hit region was Las Vegas which experienced a decline of 27.6%. IAS has described this as the poorest performing region of US in quarter 03.
There are counties where home prices have fallen by as high as 50% over the last three years, according to IAS reports. Monterey County in California is the worst affected with home prices sliding down 41% over last year’s prices coupled with an additional fall of 3.8% in 3rd quarter of this year. Florida Lee County closely follows with a decline of 39% in the corresponding period with an added decline of 4.3% in Q3 of this year.
Ryan Tomazin, IAS president has reported that the housing crisis is yet from over as is reflected by data collected over the last year. According to him though the worst phase is over, it would take some more time for home prices to recover in view of the overall slow economic growth in United States. The president of this Denver based company was speaking on the revival of housing market. The trouble was compounded by robo-signing controversy investigations initiated by state attorneys general and federal officials.
Apprehensions arise because these investigations could result in slowing down of housing market caused by holding back of foreclosures by banks. As per statement issued by IAS, lesser foreclosures lead to fewer numbers of homes available for sale in the market thereby attracting few investors. Tomazin has rightly commented that the housing market is very fragile at this moment.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Friday, November 19, 2010
Foreclosures to increase another 4.25 Million by 2012
The Federal Reserve expects about 4.25 million more foreclosure filings through 2012, and problems with the home-seizure process may threaten the U.S. housing and economic recovery, Fed Governor Elizabeth Duke said in prepared testimony.
“In the end, an overhang of homes awaiting foreclosure is unhealthy for the housing market and can delay its recovery, as well as that of the broader economy,” she said in remarks that will be presented to a congressional subcommittee tomorrow. A copy of Duke’s testimony was posted on the U.S. House of Representatives website.
A report released yesterday by a Congressional Oversight Panel found that irregularities in the foreclosure process may undermine financial stability. Attorneys general in all 50 states opened an investigation last month into whether banks and loan servicers used faulty documents or improper practices to seize homes.
U.S. regulators, including the Fed, expect to complete the on-site stage of their review into foreclosure practices this year and plan to publish their findings in early 2011, Duke said. The Fed estimates that the U.S. will have about 2.25 million residential foreclosure filings this year, and again next year, followed by 2 million more in 2012, she added in the statement to the Subcommittee on Housing and Community Opportunity.
“Financial institutions face a number of risks if inadequate controls result in faulty foreclosure documents or failure to follow legal procedures,” Duke said. “We are gathering information to ensure that the institutions we supervise have adequately assessed these risks and have accounted for them properly.”
The Fed’s “forceful” response to the financial crisis over the past two years, including its purchase of mortgage- backed securities, has reduced mortgage rates and made home loans more affordable, she said.
But one of the major problems the Fed faces is they continue to manipulate the currency and borrowing policies while the White House has done nothing to stimulate real business growth in the last two years, as a matter of fact things have gotten worse.
The Fed needs to change it's focus and protect the value of the US Dollar. The Obama administration needs to become more business friendly and PDQ! Pretty Damn Quick! Otherwise these numbers are low.
And what about the paperwork debacle from Bank of America, Can anybody say clear title? We have not heard the last of that. As a matter of fact we will soon hear that Banks cannot legally sale the properties it currently owns, because guess what? It does not legally own them! The people foreclosed on still are the legal owners! Just wait, It will come out!
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
“In the end, an overhang of homes awaiting foreclosure is unhealthy for the housing market and can delay its recovery, as well as that of the broader economy,” she said in remarks that will be presented to a congressional subcommittee tomorrow. A copy of Duke’s testimony was posted on the U.S. House of Representatives website.
A report released yesterday by a Congressional Oversight Panel found that irregularities in the foreclosure process may undermine financial stability. Attorneys general in all 50 states opened an investigation last month into whether banks and loan servicers used faulty documents or improper practices to seize homes.
U.S. regulators, including the Fed, expect to complete the on-site stage of their review into foreclosure practices this year and plan to publish their findings in early 2011, Duke said. The Fed estimates that the U.S. will have about 2.25 million residential foreclosure filings this year, and again next year, followed by 2 million more in 2012, she added in the statement to the Subcommittee on Housing and Community Opportunity.
“Financial institutions face a number of risks if inadequate controls result in faulty foreclosure documents or failure to follow legal procedures,” Duke said. “We are gathering information to ensure that the institutions we supervise have adequately assessed these risks and have accounted for them properly.”
The Fed’s “forceful” response to the financial crisis over the past two years, including its purchase of mortgage- backed securities, has reduced mortgage rates and made home loans more affordable, she said.
But one of the major problems the Fed faces is they continue to manipulate the currency and borrowing policies while the White House has done nothing to stimulate real business growth in the last two years, as a matter of fact things have gotten worse.
The Fed needs to change it's focus and protect the value of the US Dollar. The Obama administration needs to become more business friendly and PDQ! Pretty Damn Quick! Otherwise these numbers are low.
And what about the paperwork debacle from Bank of America, Can anybody say clear title? We have not heard the last of that. As a matter of fact we will soon hear that Banks cannot legally sale the properties it currently owns, because guess what? It does not legally own them! The people foreclosed on still are the legal owners! Just wait, It will come out!
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help, We have helped others we can help you...
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Thursday, October 28, 2010
Foreclosure Crisis Is Spreading
Foreclosure Crisis Is Spreading, New Data Show
October 28, 2010 ShareShare
The foreclosure crisis took an ominous turn Thursday as a new report indicated that foreclosure activity is spreading from states that have been at the heart of the problem into places like Chicago and Seattle.
And a backlog of foreclosed properties may chill the housing market for years to come. Rick Sharga of RealtyTrac, which released the data, said he expects home prices to remain fairly stagnant until 2014.
Eleven out of the nation's 20 largest metropolitan areas saw increased foreclosure activity in the third quarter compared with the same period last year, according to the foreclosure listing firm.
The top eight metro areas for foreclosures were in Nevada, California and Arizona, said Sharga, a senior vice president.
"[Those] … areas were overbuilt, the homes became significantly undervalued [and] underqualified borrowers were put into those homes with toxic loans that ended up being ticking time bombs," he said. "When market prices finally stopped going up, the whole house of cards crumbled in all of those areas."
Those three states and Florida accounted for 19 of the top 20 metropolitan areas with the highest foreclosure rates between July and September, the report showed. Even though they remain the nation's foreclosure hotbeds, many of their metro areas saw declines in the number of households that received foreclosure-related filings.
But many cities in other states saw a spike in foreclosure activity.
"The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn't been previously affected," Sharga said.
The Seattle-Tacoma-Bellevue metro area registered the sharpest annual increase: 71 percent. One in every 129 households received a foreclosure filing.
The Chicago-Naperville-Joliet metropolitan area posted the second-highest annual jump, a 35 percent increase. One in every 84 households received a foreclosure notice.
Among the other metro areas where foreclosure activity jumped by a large margin this summer were Houston-Sugar Land-Baytown, up 26 percent; Detroit-Warren-Livonia, at nearly 23 percent; and, Atlanta-Sandy Springs-Marietta, up 20 percent.
Mark Zandi, chief economist with Moody's Analytics, agreed that the foreclosure crisis was moving into a new phase.
House flippers, subprime borrowers and those who lost their jobs early in the recession have largely worked through the system, Zandi said.
"Now what you're seeing is more strategic defaulting -- more recently unemployed people who have exhausted their savings, sold assets and even borrowed money from relatives to keep paying the mortgage," he said. "There's nothing left for them to do.
"Everyone is being touched by this now," Zandi told NPR.
RealtyTrac's data also show that foreclosures, once largely correlated with bad loans and overpricing, are now following expanding unemployment problems. That means markets like Chicago and Seattle are seeing more foreclosures than ever before.
The U.S. unemployment rate hit 9.6 percent last month. In the Seattle/Bellevue/Everette metro area, the rate was slightly lower, at 8.6 percent.
Still, many troubled homeowners there have been unable to hang on. As a result, there's been no letup in the inventory of foreclosed homes on the market this year, said John Bauer, an agent with ZipRealty in Seattle who represents lenders selling foreclosed properties.
"It has been on an upward trend curve ever since 2008," Bauer said. "And not just the third quarter of this year, but the last 12 months, it's been on a steady ascension."
Chicago also had the third-highest number of homes repossessed by lenders during the quarter -- 12,568 -- behind the Phoenix metro area's 14,317 and the Miami metro area's 12,963, RealtyTrac said.
In all, 133 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity in the three months ended Sept. 30, RealtyTrac said.
The Las Vegas-Paradise, Nev., metropolitan area topped the list of metropolitan areas with the highest foreclosure rates in the quarter, with one in every 25 homes receiving a foreclosure warning -- more than five times the national average. But foreclosure filings declined 20 percent from the same quarter last year.
"It's not out of the woods yet, it's just less bad than it was a year ago," Sharga said.
Rounding out the rest of the top 10 metros with the highest foreclosure rate were Cape Coral-Fort Myers, Fla.; Modesto, Calif.; Stockton, Calif.; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Miami-Fort Lauderdale-Pompano Beach, Fla.; Phoenix-Mesa-Scottsdale, Ariz.; Bakersfield, Calif.; and Vallejo-Fairfield, Calif.
Banks seized more than 816,000 homes in the first nine months of the year and are on pace to seize more than a million.
Wells Fargo, one of the nation's largest lenders, conceded Wednesday that tens of thousands of its foreclosure documents did not meet the legal standard, throwing those proceedings into question. That revelation comes on the heels of similar concerns at Bank of America and Ally Financial's GMAC Mortgage, which briefly suspended foreclosures.
Wells Fargo said the foreclosure affidavits did not strictly adhere to the required procedures, but said it believes all the foreclosures in question to be legitimate.
Sharga said the controversy over sloppy paperwork was not a factor during the third quarter. He added that preliminary data from this month show almost no change in foreclosure activity since September.
"We're not seeing what we might have anticipated in terms of a falloff," Sharga said.
NPR's Paul Brown contributed to this report, which also contains material from The Associated Press Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801 begin_of_the_skype_highlighting 502-969-1801 end_of_the_skype_highlighting
October 28, 2010 ShareShare
The foreclosure crisis took an ominous turn Thursday as a new report indicated that foreclosure activity is spreading from states that have been at the heart of the problem into places like Chicago and Seattle.
And a backlog of foreclosed properties may chill the housing market for years to come. Rick Sharga of RealtyTrac, which released the data, said he expects home prices to remain fairly stagnant until 2014.
Eleven out of the nation's 20 largest metropolitan areas saw increased foreclosure activity in the third quarter compared with the same period last year, according to the foreclosure listing firm.
The top eight metro areas for foreclosures were in Nevada, California and Arizona, said Sharga, a senior vice president.
"[Those] … areas were overbuilt, the homes became significantly undervalued [and] underqualified borrowers were put into those homes with toxic loans that ended up being ticking time bombs," he said. "When market prices finally stopped going up, the whole house of cards crumbled in all of those areas."
Those three states and Florida accounted for 19 of the top 20 metropolitan areas with the highest foreclosure rates between July and September, the report showed. Even though they remain the nation's foreclosure hotbeds, many of their metro areas saw declines in the number of households that received foreclosure-related filings.
But many cities in other states saw a spike in foreclosure activity.
"The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn't been previously affected," Sharga said.
The Seattle-Tacoma-Bellevue metro area registered the sharpest annual increase: 71 percent. One in every 129 households received a foreclosure filing.
The Chicago-Naperville-Joliet metropolitan area posted the second-highest annual jump, a 35 percent increase. One in every 84 households received a foreclosure notice.
Among the other metro areas where foreclosure activity jumped by a large margin this summer were Houston-Sugar Land-Baytown, up 26 percent; Detroit-Warren-Livonia, at nearly 23 percent; and, Atlanta-Sandy Springs-Marietta, up 20 percent.
Mark Zandi, chief economist with Moody's Analytics, agreed that the foreclosure crisis was moving into a new phase.
House flippers, subprime borrowers and those who lost their jobs early in the recession have largely worked through the system, Zandi said.
"Now what you're seeing is more strategic defaulting -- more recently unemployed people who have exhausted their savings, sold assets and even borrowed money from relatives to keep paying the mortgage," he said. "There's nothing left for them to do.
"Everyone is being touched by this now," Zandi told NPR.
RealtyTrac's data also show that foreclosures, once largely correlated with bad loans and overpricing, are now following expanding unemployment problems. That means markets like Chicago and Seattle are seeing more foreclosures than ever before.
The U.S. unemployment rate hit 9.6 percent last month. In the Seattle/Bellevue/Everette metro area, the rate was slightly lower, at 8.6 percent.
Still, many troubled homeowners there have been unable to hang on. As a result, there's been no letup in the inventory of foreclosed homes on the market this year, said John Bauer, an agent with ZipRealty in Seattle who represents lenders selling foreclosed properties.
"It has been on an upward trend curve ever since 2008," Bauer said. "And not just the third quarter of this year, but the last 12 months, it's been on a steady ascension."
Chicago also had the third-highest number of homes repossessed by lenders during the quarter -- 12,568 -- behind the Phoenix metro area's 14,317 and the Miami metro area's 12,963, RealtyTrac said.
In all, 133 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity in the three months ended Sept. 30, RealtyTrac said.
The Las Vegas-Paradise, Nev., metropolitan area topped the list of metropolitan areas with the highest foreclosure rates in the quarter, with one in every 25 homes receiving a foreclosure warning -- more than five times the national average. But foreclosure filings declined 20 percent from the same quarter last year.
"It's not out of the woods yet, it's just less bad than it was a year ago," Sharga said.
Rounding out the rest of the top 10 metros with the highest foreclosure rate were Cape Coral-Fort Myers, Fla.; Modesto, Calif.; Stockton, Calif.; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Miami-Fort Lauderdale-Pompano Beach, Fla.; Phoenix-Mesa-Scottsdale, Ariz.; Bakersfield, Calif.; and Vallejo-Fairfield, Calif.
Banks seized more than 816,000 homes in the first nine months of the year and are on pace to seize more than a million.
Wells Fargo, one of the nation's largest lenders, conceded Wednesday that tens of thousands of its foreclosure documents did not meet the legal standard, throwing those proceedings into question. That revelation comes on the heels of similar concerns at Bank of America and Ally Financial's GMAC Mortgage, which briefly suspended foreclosures.
Wells Fargo said the foreclosure affidavits did not strictly adhere to the required procedures, but said it believes all the foreclosures in question to be legitimate.
Sharga said the controversy over sloppy paperwork was not a factor during the third quarter. He added that preliminary data from this month show almost no change in foreclosure activity since September.
"We're not seeing what we might have anticipated in terms of a falloff," Sharga said.
NPR's Paul Brown contributed to this report, which also contains material from The Associated Press Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801 begin_of_the_skype_highlighting 502-969-1801 end_of_the_skype_highlighting
Monday, October 18, 2010
Bank of America to Resume Foreclosures
Curtailing a moratorium sooner than expected, Bank of America announced Monday that it would resume foreclosures by next week in 23 states where court approval is needed to go ahead.
The decision covers 102,000 mortgages. While the bank said it had found no evidence that foreclosures had been made in error, it said the foreclosure moratorium would remain in effect in the 27 states where a judicial proceeding is not required, as the review proceeds state by state.
While JPMorgan Chase, GMAC and other institutions have imposed similar freezes, Bank of America is the only one to put it into effect in all 50 states, and as the country’s biggest bank, it is closely watched by the rest of the industry.
In recent weeks, reports of improper procedures at mortgage servicers, like having officials sign thousands of documents a month — so-called robo-signers — have set off a political furor. Last Wednesday, all 50 state attorneys general announced an investigation of the mortgage service industry practices.
“As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,” the bank said in a statement. “Our decision to review our process and later, to extend our review to all 50 states, has been an important step to give customers confidence they are being treated fairly.” By NELSON D. SCHWARTZ
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
The decision covers 102,000 mortgages. While the bank said it had found no evidence that foreclosures had been made in error, it said the foreclosure moratorium would remain in effect in the 27 states where a judicial proceeding is not required, as the review proceeds state by state.
While JPMorgan Chase, GMAC and other institutions have imposed similar freezes, Bank of America is the only one to put it into effect in all 50 states, and as the country’s biggest bank, it is closely watched by the rest of the industry.
In recent weeks, reports of improper procedures at mortgage servicers, like having officials sign thousands of documents a month — so-called robo-signers — have set off a political furor. Last Wednesday, all 50 state attorneys general announced an investigation of the mortgage service industry practices.
“As was the case for our judicial state review, our initial assessment findings show the basis for our foreclosure decisions is accurate,” the bank said in a statement. “Our decision to review our process and later, to extend our review to all 50 states, has been an important step to give customers confidence they are being treated fairly.” By NELSON D. SCHWARTZ
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
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