originally appeared in USA Today:
Here's some good news on home loan delinquencies.
If not for all the homeowners who haven't paid their mortgages in more than a year, the nation's home loan delinquency rate would be only slightly higher than normal, shows new research from credit monitor TransUnion.
The delinquency rate would fall to about 2.5%, down from more than 5%, if those borrowers were excluded, says a TransUnion vice president.
Before the foreclosure crisis and housing bust, the normal mortgage delinquency rate was about 1.5% to 2%, TransUnion says.
The company expects the mortgage delinquency rate -- which looks at borrowers 60 or more days past due -- to finish this year at 5.32% and to drop only slightly to 5.06% by the end of next year.
The nation's higher-than-normal mortgage loan delinquency rate is not driven by new loans. It's a lot of folks ... who have been delinquent for a really long time, their vice president says.
Before the recession, it was unusual for a borrower to go more than 180 days without either being able to fix their situation or go through the foreclosure process, TransUnion says.
At the end of October, homes that went through a foreclosure sale were delinquent an average of 728 days, mortgage tracker Lender Processing Services says. That was up from 497 days two years earlier.
If the pace of improvement in curing delinquent loans doesn't pick up, national home loan delinquency rates will take another four years to get back to normal, TransUnion says.
More than 80% of the nation's currently delinquent home loans were originated before 2008, TransUnion's data show. The pre-2008 loans make up 54% of all mortgages, it says.
TransUnion predicts the biggest declines in mortgage delinquency rates next year will occur in several states that were hit hardest by foreclosures. Nevada will see a 19% drop. California and Arizona will post 12% declines.
In all of those states, foreclosures don't go through the courts so they can occur more rapidly than they typically do in states where foreclosures do go through the courts.
Thirteen states will see mortgage delinquency rates rise next year, TransUnion says.
They are largely states that have lower delinquency rates now compared with the national average, TransUnion says, and include North Dakota, South Dakota and Nebraska.
Despite likely increases next year, those three states will end 2013 with the lowest mortgage delinquency rates in the nation, TransUnion predicts.
North Dakota, which is experiencing an energy boom, will be at 1.5% of home loans being 60 or more days late. Nebraska and South Dakota will come in at about 2.3%.
Florida will have the highest delinquency rate at almost 12%, followed by Nevada at just over 8%.
The national mortgage delinquency rate peaked in the fourth quarter of 2009 at 6.89% after rising 12 consecutive quarters from its 1.9% mark in the fourth quarter of 2006, TransUnion says.
Showing posts with label home foreclosures. Show all posts
Showing posts with label home foreclosures. Show all posts
14 December 2012
19 April 2012
Foreclosure Crisis Terrible in Certain Regions
Story first appeared in USA Today.
When a local real estate agent pulls up to a battered, four-unit apartment building at lunch hour, he's just over a mile as the seagull flies from the gated, oceanfront palaces of South Florida's wealthiest.
The real estate agent, who specializes in distressed properties, takes photos of a kitchen ceiling while checking a house in West Palm Beach, Fla., last month.
But this stretch of 21st Street, pocked by homes with boarded-up windows and dead-ending at railroad tracks, is unlikely to make it to a tourism poster. He turns the car around in case he needs to make a quick exit and tucks a Smith & Wesson pistol into his jeans.
The unit is missing its front door, and there is what looks like a dead animal in the center of the living-room floor. The stench is unbearable, but it seems like nobody is home currently.
The agent is here because he specializes in distressed properties and Florida, thrashed by the mortgage crisis, has thousands. But figuring out just how many is not simple.
Each month, analysts issue reports detailing the number of homes nationwide in foreclosure or held by banks. The implication is that if we can match buyers with these houses or help borrowers stay put, the economy will be able to heal at last.
At ground level, though, it's more complicated. The building on 21st Street is a good example.
The last buyer paid $309,000 six years ago. But today the county appraiser says it's worth less than a quarter of that amount. A bank filed foreclosure papers in 2008, but it still belongs to the original owner, subject to fines and liens by the city. The bank sold the underlying mortgage note to a hedge fund for pennies on the dollar. That company has hired the agent to check the condition and occupancy status of its investment, on the way to making it profitable.
It's one thing to measure the crisis in the black and white of statistics. But here's a reminder that reality also comes shaded in gray.
People in the foreclosure trade have a name for buildings like the one on 21st Street: "shadow inventory." Broadly speaking, it refers to all the homes in the foreclosure pipeline that will eventually reach the market but aren't there yet. The definition, though, varies considerably from analyst to analyst and there is truth to be gleaned from each of their studies.
Numbers matter because figuring out how long the debacle will last requires knowing the extent of the damage. But if we're going to take stock, reading reports may not be enough.
The only way to fully comprehend what's going on out there is to move beyond the figures and charts, and venture into the shadows.
On a Monday afternoon, Courtroom 4B's benches are packed. Lawyers and home owners cluster around the door and stand along the walls. On a board in the lobby, 16 sheets of paper list 136 foreclosure cases awaiting the Judge on this one afternoon.
Too late for a seat, a lawyer representing homeowners leans over to explain that today's crowd in 4A is merely the norm, reflecting all those houses piling up in the pipeline.
Florida is one of 20 states that rely entirely on courts to deal with the crisis. A major reason cases drag on for an average of two years is that last year's robo-signing scandal forced banks to put the brakes on many cases with suspect documents. A settlement with state and federal officials has allowed the process to get moving again.
But proceedings in this courtroom hint at the confusion, as well as delaying tactics by lenders and borrowers, leaving scores of homes stuck.
One of the first cases is Wells Fargo v. Killgore. The lawyer for a condo association steps forward, pursuing $15,000 in unpaid dues and fines on a Boynton Beach apartment in foreclosure. But a woman objects. She is the daughter of the man who lived in the condominium. She explains that her father is in a nursing home. Years ago, he took out a reverse mortgage and when he got ill, the family agreed to surrender the home, a deal they thought was long done. Somehow, though, the condo is still listed in her father's name. It's not clear exactly how a home like this one should be classified or what it will take to figure out a solution.
Later, the Judge calls up the parties in another case, Nationstar Mortgage v. Sands. The homeowner tells the judge he thought a loan modification had been finalized, allowing him to keep the home, until a lawyer called to say it was back in foreclosure.
From the courthouse, it's a 15-minute drive to a neighborhood called Eden Place. On alphabetically named streets, well-tended homes built a half-century ago snuggle amid tropical foliage.
Of 13 houses on this block in Lake Worth, two are owned by banks following foreclosure. Two more sit abandoned. One was bought out of foreclosure by a local doctor last fall, but appears uninhabitable. The other, boarded up, still belongs to its original owner.
Houses on this block once sold for $250,000 or more; they've lost at least half their value. Eventually, the vacant homes will come on to the market, affecting the worth of neighboring houses. Analysts pore over data trying to figure out just how many homes like this are hidden from view.
Economists at CoreLogic, a California company that analyzes mortgage data, chart 1.6 million homes in shadow inventory nationwide. They count homes not listed for sale, with loans at least 90 days overdue, in foreclosure or bank-owned.
Others say the shadow is much bigger. Amherst Securities in New York says it covers from 8.3 million to 10.4 million homes. The analysis includes homes with loans at least 60 days overdue, those that were delinquent before and are likely to default again, and thousands whose owners are making payments but may give up because they owe more than homes are worth. Some people are definitely underestimating the seriousness of the problem.
Measuring shadows grows more difficult continuing down J Street. A two-family house with a carport has gone through foreclosure and is owned by the Federal Home Loan Mortgage Corp., records show. But tenants say they are still paying rent to the previous owner. There are scores of homes like this, experts say, owned by lenders who haven't pursued eviction.
Lenders have good reasons to delay. Empty homes require upkeep and claiming ownership means shouldering taxes and fines. As long as a case in still in process, loan servicers continue to collect their fees.
A recent check of records in this one county found more than 10,000 cases in which a bank secured a final judgment more than a year ago, yet there has still been no change in title.
Then there are houses like one where a man answers the door. The resident, former laser technician, bought it for $44,000 in 1995. After a car accident left him disabled, he says he tried to catch up on payments, but couldn't meet demands to pay accumulated late fees. The lender filed foreclosure papers three years ago. He says it's been years since he's made a payment, and he tried for a loan modification, but every three months was told to reapply. Last fall, the lender claimed his house at auction for $500.
It's now owned by Bank of America, whose representatives still call. He tells callers he no longer owns the place, but they don't believe him.
The housing market is working through a riddle, determining what homes are worth given limited demand. But shadow inventory keeps part of the supply hidden.
It's troubling to see vandalized homes and talk with families worried about eviction. But the difference between the number of homes listed for sale and all the others is troubling.
There is, however, substantial demand for foreclosures at the right price. Some properties can be purchased and turned around into profitable rentals. You can't build these houses for what they cost.
But investors complain banks are not realistic about the prices they'll accept. The real estate agent specializing in distressed properties, says slowing the flow of homes into the market artificially lowers inventory in some neighborhoods, which can temporarily lift prices. At the same time, lenders are increasingly selling homes or the underlying loans in bulk to hedge funds.
That's where he comes in, tracking down borrowers to convince them to trade deeds for cash, and turning around homes for rent or sale. At this rate, he figures it will be three to five years before lenders let all the homes go. The risk is that going too slow could artificially raise prices in some areas, which might spur investors who bought homes as rentals to put them up for sale.
The truth of the matter is we would have already gotten over it if they just let the properties get out there and get sold.
When a local lawyer moved to Florida three decades ago as a lawyer for farm workers, dirt along Lantana Road was planted with cash crops. Today, what once was a U-Pick farm is a neighborhood of 262 homes called Strawberry Lakes.
Sometimes you can't tell when a house is in foreclosure unless you go back two or three times, because the neighbors will do things like park their cars in the driveway, all in an effort to make things more secure.
But with all these foreclosed homes, there are zero 'For Sale' signs.
The lawyer hasn't counseled farm workers since the 1980s. But she found Strawberry Lakes after battling to keep her own house. In 2008, Deutsche Bank filed foreclosure papers against her. By then, she had spent years representing insurance companies in fraud cases. She spotted suspect signatures on loan documents. Her detective work was instrumental in exposing the robo-signing scandal, reflected in $18 million awarded in the settlement between lenders and government officials.
She remains unconvinced banks are doing enough to resolve the crisis. Strawberry Lakes is Exhibit A.
Homes here sell for a third of the $275,000 or more they fetched at the top of the bubble. At least three dozen are in foreclosure, with many cases dating back three or four years. Of those, at least five are houses where lenders have won final judgments without moving forward.
In addition, at least 57 houses not in foreclosure are owned by people who paid far above what they're now worth.
The president of the homeowner's association, says as neighbors fall behind, more responsibility lands on everyone else. In Strawberry Lakes, 105 homeowners are behind on HOA dues, a hint more could be in trouble.
Uncertainty makes it difficult to gauge the duration of the crisis. But Szymoniak cautions against assuming that the problem is going away.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
When a local real estate agent pulls up to a battered, four-unit apartment building at lunch hour, he's just over a mile as the seagull flies from the gated, oceanfront palaces of South Florida's wealthiest.
The real estate agent, who specializes in distressed properties, takes photos of a kitchen ceiling while checking a house in West Palm Beach, Fla., last month.
But this stretch of 21st Street, pocked by homes with boarded-up windows and dead-ending at railroad tracks, is unlikely to make it to a tourism poster. He turns the car around in case he needs to make a quick exit and tucks a Smith & Wesson pistol into his jeans.
The unit is missing its front door, and there is what looks like a dead animal in the center of the living-room floor. The stench is unbearable, but it seems like nobody is home currently.
The agent is here because he specializes in distressed properties and Florida, thrashed by the mortgage crisis, has thousands. But figuring out just how many is not simple.
Each month, analysts issue reports detailing the number of homes nationwide in foreclosure or held by banks. The implication is that if we can match buyers with these houses or help borrowers stay put, the economy will be able to heal at last.
At ground level, though, it's more complicated. The building on 21st Street is a good example.
The last buyer paid $309,000 six years ago. But today the county appraiser says it's worth less than a quarter of that amount. A bank filed foreclosure papers in 2008, but it still belongs to the original owner, subject to fines and liens by the city. The bank sold the underlying mortgage note to a hedge fund for pennies on the dollar. That company has hired the agent to check the condition and occupancy status of its investment, on the way to making it profitable.
It's one thing to measure the crisis in the black and white of statistics. But here's a reminder that reality also comes shaded in gray.
People in the foreclosure trade have a name for buildings like the one on 21st Street: "shadow inventory." Broadly speaking, it refers to all the homes in the foreclosure pipeline that will eventually reach the market but aren't there yet. The definition, though, varies considerably from analyst to analyst and there is truth to be gleaned from each of their studies.
Numbers matter because figuring out how long the debacle will last requires knowing the extent of the damage. But if we're going to take stock, reading reports may not be enough.
The only way to fully comprehend what's going on out there is to move beyond the figures and charts, and venture into the shadows.
On a Monday afternoon, Courtroom 4B's benches are packed. Lawyers and home owners cluster around the door and stand along the walls. On a board in the lobby, 16 sheets of paper list 136 foreclosure cases awaiting the Judge on this one afternoon.
Too late for a seat, a lawyer representing homeowners leans over to explain that today's crowd in 4A is merely the norm, reflecting all those houses piling up in the pipeline.
Florida is one of 20 states that rely entirely on courts to deal with the crisis. A major reason cases drag on for an average of two years is that last year's robo-signing scandal forced banks to put the brakes on many cases with suspect documents. A settlement with state and federal officials has allowed the process to get moving again.
But proceedings in this courtroom hint at the confusion, as well as delaying tactics by lenders and borrowers, leaving scores of homes stuck.
One of the first cases is Wells Fargo v. Killgore. The lawyer for a condo association steps forward, pursuing $15,000 in unpaid dues and fines on a Boynton Beach apartment in foreclosure. But a woman objects. She is the daughter of the man who lived in the condominium. She explains that her father is in a nursing home. Years ago, he took out a reverse mortgage and when he got ill, the family agreed to surrender the home, a deal they thought was long done. Somehow, though, the condo is still listed in her father's name. It's not clear exactly how a home like this one should be classified or what it will take to figure out a solution.
Later, the Judge calls up the parties in another case, Nationstar Mortgage v. Sands. The homeowner tells the judge he thought a loan modification had been finalized, allowing him to keep the home, until a lawyer called to say it was back in foreclosure.
From the courthouse, it's a 15-minute drive to a neighborhood called Eden Place. On alphabetically named streets, well-tended homes built a half-century ago snuggle amid tropical foliage.
Of 13 houses on this block in Lake Worth, two are owned by banks following foreclosure. Two more sit abandoned. One was bought out of foreclosure by a local doctor last fall, but appears uninhabitable. The other, boarded up, still belongs to its original owner.
Houses on this block once sold for $250,000 or more; they've lost at least half their value. Eventually, the vacant homes will come on to the market, affecting the worth of neighboring houses. Analysts pore over data trying to figure out just how many homes like this are hidden from view.
Economists at CoreLogic, a California company that analyzes mortgage data, chart 1.6 million homes in shadow inventory nationwide. They count homes not listed for sale, with loans at least 90 days overdue, in foreclosure or bank-owned.
Others say the shadow is much bigger. Amherst Securities in New York says it covers from 8.3 million to 10.4 million homes. The analysis includes homes with loans at least 60 days overdue, those that were delinquent before and are likely to default again, and thousands whose owners are making payments but may give up because they owe more than homes are worth. Some people are definitely underestimating the seriousness of the problem.
Measuring shadows grows more difficult continuing down J Street. A two-family house with a carport has gone through foreclosure and is owned by the Federal Home Loan Mortgage Corp., records show. But tenants say they are still paying rent to the previous owner. There are scores of homes like this, experts say, owned by lenders who haven't pursued eviction.
Lenders have good reasons to delay. Empty homes require upkeep and claiming ownership means shouldering taxes and fines. As long as a case in still in process, loan servicers continue to collect their fees.
A recent check of records in this one county found more than 10,000 cases in which a bank secured a final judgment more than a year ago, yet there has still been no change in title.
Then there are houses like one where a man answers the door. The resident, former laser technician, bought it for $44,000 in 1995. After a car accident left him disabled, he says he tried to catch up on payments, but couldn't meet demands to pay accumulated late fees. The lender filed foreclosure papers three years ago. He says it's been years since he's made a payment, and he tried for a loan modification, but every three months was told to reapply. Last fall, the lender claimed his house at auction for $500.
It's now owned by Bank of America, whose representatives still call. He tells callers he no longer owns the place, but they don't believe him.
The housing market is working through a riddle, determining what homes are worth given limited demand. But shadow inventory keeps part of the supply hidden.
It's troubling to see vandalized homes and talk with families worried about eviction. But the difference between the number of homes listed for sale and all the others is troubling.
There is, however, substantial demand for foreclosures at the right price. Some properties can be purchased and turned around into profitable rentals. You can't build these houses for what they cost.
But investors complain banks are not realistic about the prices they'll accept. The real estate agent specializing in distressed properties, says slowing the flow of homes into the market artificially lowers inventory in some neighborhoods, which can temporarily lift prices. At the same time, lenders are increasingly selling homes or the underlying loans in bulk to hedge funds.
That's where he comes in, tracking down borrowers to convince them to trade deeds for cash, and turning around homes for rent or sale. At this rate, he figures it will be three to five years before lenders let all the homes go. The risk is that going too slow could artificially raise prices in some areas, which might spur investors who bought homes as rentals to put them up for sale.
The truth of the matter is we would have already gotten over it if they just let the properties get out there and get sold.
When a local lawyer moved to Florida three decades ago as a lawyer for farm workers, dirt along Lantana Road was planted with cash crops. Today, what once was a U-Pick farm is a neighborhood of 262 homes called Strawberry Lakes.
Sometimes you can't tell when a house is in foreclosure unless you go back two or three times, because the neighbors will do things like park their cars in the driveway, all in an effort to make things more secure.
But with all these foreclosed homes, there are zero 'For Sale' signs.
The lawyer hasn't counseled farm workers since the 1980s. But she found Strawberry Lakes after battling to keep her own house. In 2008, Deutsche Bank filed foreclosure papers against her. By then, she had spent years representing insurance companies in fraud cases. She spotted suspect signatures on loan documents. Her detective work was instrumental in exposing the robo-signing scandal, reflected in $18 million awarded in the settlement between lenders and government officials.
She remains unconvinced banks are doing enough to resolve the crisis. Strawberry Lakes is Exhibit A.
Homes here sell for a third of the $275,000 or more they fetched at the top of the bubble. At least three dozen are in foreclosure, with many cases dating back three or four years. Of those, at least five are houses where lenders have won final judgments without moving forward.
In addition, at least 57 houses not in foreclosure are owned by people who paid far above what they're now worth.
The president of the homeowner's association, says as neighbors fall behind, more responsibility lands on everyone else. In Strawberry Lakes, 105 homeowners are behind on HOA dues, a hint more could be in trouble.
Uncertainty makes it difficult to gauge the duration of the crisis. But Szymoniak cautions against assuming that the problem is going away.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
Children Negatively Impacted by Foreclosures
Story first appeared in USA Today.
One in 10 U.S. children has been or will be affected by the nation's surge in foreclosures, a new report says.
Five years into the foreclosure crisis, an estimated 2.3 million children have lived in homes lost to foreclosure, according to a report from First Focus, a Washington, D.C-based bipartisan advocacy group focused on families.
Another 3 million children live in homes at risk of foreclosure because home loans are in the foreclosure process or are seriously delinquent. And 3 million children lived or live in rental homes lost to foreclosure or at risk, the report says.
Children are the often invisible victims of the foreclosure crisis.
Foreclosure and U.S. Census Bureau data was analyzed to estimate the number of children affected. The report is the second released by First Focus on the crisis' impact on children, and the organization says it's the first to estimate the number of children affected who live in rental properties.
Not surprisingly, the impact on children is greatest in states that were hardest hit by the foreclosure crisis. In Nevada, almost 1 in 5 children lived or live in owner-occupied homes that were lost to foreclosure or are at risk of being lost.
Elsewhere, the percentages fall to 15% in Florida, followed by 14% for Arizona and 12% for California. In Alaska and North Dakota, only 2% of children are affected, the lowest rates in the country.
Being forced from home affects children's health, interrupts development and hurts their performance in school.
For every forced move that occurs during a school year, a child's math and reading scores drop as much as if they'd missed a month of school, based on a synthesis of 16 studies.
The number of affected children could be even larger. Estimates are based on mortgage loans made from 2004 to 2008, which captures the bulk of risky loans that contributed to the housing bubble. But it doesn't cover loans outside of that time. The estimate also fails to adjust for the possibility that loan delinquencies may be higher in families with more children.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
One in 10 U.S. children has been or will be affected by the nation's surge in foreclosures, a new report says.
Five years into the foreclosure crisis, an estimated 2.3 million children have lived in homes lost to foreclosure, according to a report from First Focus, a Washington, D.C-based bipartisan advocacy group focused on families.
Another 3 million children live in homes at risk of foreclosure because home loans are in the foreclosure process or are seriously delinquent. And 3 million children lived or live in rental homes lost to foreclosure or at risk, the report says.
Children are the often invisible victims of the foreclosure crisis.
Foreclosure and U.S. Census Bureau data was analyzed to estimate the number of children affected. The report is the second released by First Focus on the crisis' impact on children, and the organization says it's the first to estimate the number of children affected who live in rental properties.
Not surprisingly, the impact on children is greatest in states that were hardest hit by the foreclosure crisis. In Nevada, almost 1 in 5 children lived or live in owner-occupied homes that were lost to foreclosure or are at risk of being lost.
Elsewhere, the percentages fall to 15% in Florida, followed by 14% for Arizona and 12% for California. In Alaska and North Dakota, only 2% of children are affected, the lowest rates in the country.
Being forced from home affects children's health, interrupts development and hurts their performance in school.
For every forced move that occurs during a school year, a child's math and reading scores drop as much as if they'd missed a month of school, based on a synthesis of 16 studies.
The number of affected children could be even larger. Estimates are based on mortgage loans made from 2004 to 2008, which captures the bulk of risky loans that contributed to the housing bubble. But it doesn't cover loans outside of that time. The estimate also fails to adjust for the possibility that loan delinquencies may be higher in families with more children.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
12 January 2012
Home Foreclosures Looking Up
First appeared in CNN Money
Foreclosure filings and repossessions fell to their lowest level since 2007 last year.
Total filings, including default notices and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.
One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That's a significant improvement from the peaks reached in 2010 -- when 1.05 million homes were repossessed -- and the lowest levels seen since 2007.
More than 4 million homes have been lost to foreclosure over the past five years.
While the declines seem like good news for the housing market, where a flood of foreclosed homes has depressed home prices, much of it is due to processing delays caused by fall-out from the "robo-signing" scandal that broke in late 2010.
During the year, banks spent more time making sure paperwork was legal and proper, creating a backlog in the foreclosure pipeline. As a result, the average time it took to process a foreclosure climbed to 348 days during the fourth quarter, up from 305 days a year earlier.
"Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, chief executive officer of RealtyTrac.
However, Moore said there were "strong signs" during the second half of the year that lenders are working through foreclosure backlogs in certain markets. He expects foreclosure activity to rise above 2011's level but remain below the peak hit in 2010.
Low rates offer some help for homeowners
Early in 2011, many forecasters were predicting a wave of foreclosures due to resetting adjustable-rate mortgages, but low mortgage rates helped many borrowers refinance into more affordable loans, said Moore.
The government helped as well, through efforts like the Home Affordable Refinance Program (HARP), which made refinancing easier for borrowers who owe more on their mortgage than their homes are worth.
Turning foreclosures into rentals
Government foreclosure prevention programs, including HARP and the Home Affordable Modification Program (HAMP), have started about 5.5 million mortgage modifications since April 2009, according to the U.S. Department of Housing and Urban Development.
"Programs like HAMP and HARP have definitely made a dent in the foreclosure problem," said Moore "However, they are certainly not living up to their billing of preventing several million foreclosures. In addition, many [HAMP] homeowners fall back into foreclosure later on."
Of course, there were still plenty of factors working against homeowners in 2011, including the continued erosion in home prices. Falling prices rob homeowners of home equity, which they can tap if they need emergency cash.
Foreclosure hot spots
Hot spots for foreclosures remain mostly in "bubble states," where speculative investors helped drive up home prices beyond their fundamental values during the mid-2000s housing boom.
Nevada, where one out of every 16 households received some kind of default notice during the year, was the worst hit of all, a distinction it has held for the fifth consecutive year.
Foreclosure free ride: 3 years, no payments
Arizona had the second highest foreclosure rate and California came in third. Florida, which had been running neck-and-neck with the other "Sand States" in past years, fell to seventh, behind Georgia, Utah and Michigan.
Among metro areas, Las Vegas suffered from the highest foreclosure rate in 2011. California put seven cities in the top 10, led by Stockton in the second slot. Other cities in the top 10 included Phoenix, which finished sixth, and Reno, Nev. was eighth.
Subscribe to:
Posts (Atom)
