Foreclosures continued to rise in February

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Submitted by Ex-SD on March 12, 2009 - 3:29am

Complete Article Here: http://www.msnbc.msn.com/id/29642442/

*Foreclosures up 30 percent from same month last year despite lenders’ moratoriums

*Despite halts on new foreclosures by several major lenders, the number of households threatened with losing their homes rose 30 percent from last year's levels, RealtyTrac reported Thursday.

*While the number of foreclosures continue to soar nationwide, banks have held off listing properties for sale, Sharga said. There were around 700,000 such properties nationwide at the end of last year, making up a "shadow inventory" of unsold homes that could drag the housing crisis out even longer.

*"It's going to take us longer than you might anticipate to burn through he inventory of distressed properties," he said.

Submitted by Ex-SD on March 12, 2009 - 5:33am.

Rise in foreclosures 'a shock'

NEW YORK (CNNMoney.com) -- The foreclosure picture suddenly darkened again in February.

More than 74,000 homes were lost to bank repossessions during the month, up from 67,000 in January, according to a regular monthly report from RealtyTrac, the online marketer of foreclosed properties. Nearly 1.2 million have been lost since the foreclosure crisis hit in August 2007.

The number of foreclosure filings rose 6% during the month after falling 10% in January. Worse, filings leaped nearly 30% compared with February 2008. And the results confounded expectations: A downtrend had been expected due to the numerous foreclosure moratoriums in effect during the month.

"We were very surprised," said RealtyTrac spokesman Rick Sharga. "The moratorium were led by big players like Fannie and Freddie and all the major banks. It was supposed to cover the whole waterfront. The fact that foreclosures still went up was a shock."

A particularly troubling aspect of the report was that, for many borrowers, once they go into default, they never get out despite moratorium efforts. That's borne out by comparing bank repossessions - homes actually lost by borrowers - with total foreclosure filings: Nationally, repossessions increased 11% for the month, almost double the 6% rise for filings.

The same holds true for year-over-year figures: February filings jumped 30% compared with last year but repossessions rang up a 60% gain.

The reason so many people lose their homes once they are in default is partially attributed to the severe home price drops recorded in many of the worst-hit areas. When borrowers are severely underwater, owing more than their homes are worth, it removes an incentive to keep up with mortgage payments. Some simply walk away.
The worst hit states

Many states that had previously escaped the worst ravages of the foreclosure plague have started to feel the effects. In South Carolina, foreclosure filings, which include notices of default, notices of foreclosure sale and bank repossessions, skyrocketed 254% compared with last February. The state recorded a filing for every 818 households, the 20th highest rate among the states.

As foreclosures soared, so did South Carolina's unemployment. By January, that had reached 10.4%, the second highest rate, after Michigan, in the nation. It rose 1.6 percentage points higher than December, the biggest increase in any state, and it jumped 4.7 percentage points over the past 12 months, also more than anywhere else.

According to the Neighborhood Assistance Corporation of America CEO, Bruce Marks, poorly underwritten mortgages is still the main source of foreclosures in the state. "It continues to be problem mortgages," he said, "loans that were unaffordable from the start. But unemployment is adding to that."

NACA, which counsels at-risk borrowers and refinances many into low-cost mortgages, is throwing a counseling event in Columbia, S.C., this weekend. The agency expects to host more than 20,000 attendees and has already pre-registered more than 7,500 homeowners.

The dubious honor of worst foreclosure state still belongs to Nevada, where one of every 70 households had a filing. Foreclosures are up 156% from last February and 9% from January. More than 2,800 homes were repossessed by banks during the month.

Second was Arizona, with one filing for every 147 households, up 88% year-over-year and 23% from January. California, with nearly 81,000 filings, had more than any other state, with a rate of one for every 165 households. Florida had more than 46,000, one for every 188 households.

Other hard hit states were Idaho (one in 358), Michigan (one in 360) and Illinois (one in 369).
Worst hit cities

Among metro areas, Las Vegas, where one in every 60 housing units received a foreclosure filing in February, led all other cities with populations of 200,000 or more. Another Nevada city, Reno, had one for every 108 hosueholds, the eighth highest rate in the nation.

The Cape Coral, Fla., metro area had the second highest foreclosure rate in February, with one in 65 housing units.

The rest of the top 10 consisted of six California cities: Stockton (one in 67), Modesto (one in 68), Merced (one in 74), Riverside-San Bernardino (one in 80), Bakersfield (one in 85) and Vallejo-Fairfield (one in 111).

Phoenix rounded out the top 10, with one in every 110 housing units receiving a foreclosure filing. The Phoenix metro area posted the ninth highest foreclosure rate in February.

http://money.cnn.com/2009/03/12/real_est...

Submitted by Nor-LA-SD-guy on March 12, 2009 - 8:20am.

Ex-SD wrote:
Rise in foreclosures 'a shock'

Many states that had previously escaped the worst ravages of the foreclosure plague have started to feel the effects. In South Carolina, foreclosure filings, which include notices of default, notices of foreclosure sale and bank repossessions, skyrocketed 254% compared with last February. The state recorded a filing for every 818 households, the 20th highest rate among the states.

The rest of the top 10 consisted of six California cities: Stockton (one in 67), Modesto (one in 68), Merced (one in 74), Riverside-San Bernardino (one in 80), Bakersfield (one in 85) and Vallejo-Fairfield (one in 111).

Phoenix rounded out the top 10, with one in every 110 housing units receiving a foreclosure filing. The Phoenix metro area posted the ninth highest foreclosure rate in February.

http://money.cnn.com/2009/03/12/real_estate/new_foreclosure_jump/index.htm?postversion=2009031204

From a Contrarian stance,

Seems to me at this point in the SoCal area anyway,
This is just a sign of the more Reluctant hold outs finally capitulating .

Submitted by denverite on March 12, 2009 - 10:01am.

The lower and more inland end is still foreclosing at a rapid rate, although many speculators/buyers have jumped in lately. What does this portend for the coastal areas whose pricing has barely budged, and whose truly exotic loans will be resetting for the next two years? Guess. I don't believe that the massive federal government intervention programs can save the higher end areas, though many would like to believe so.

Just a few months back, the interesting discussions on this board were starting to look like endangered species. Oh how things have changed.

Submitted by DWCAP on March 12, 2009 - 11:05am.

At least they finally have a number on the "Shadow Inventory". 700k homes owned by banks but not on a MLS. Remember when we use to debate about the existance of a shadow inventory in an meaningful way?

This article is also quoteing that as of December 2008 12% of all morgages were atleast 1 month late. Now here in March we have had a crumbling job market and 650k plus new filings for unemployment every week. I just dont see how this wont keep going for a long time if people cant get work. I wonder if we have already hit 15% for March 09.

On a side note, Obama's plan is to refi a house up to 31% of a borrowers income. If the borrower is a two income household, and one income is lost, will the house be refied to 31% of only that one income? That could be a huge swing in payments!

Submitted by rube on March 12, 2009 - 4:12pm.

"On a side note, Obama's plan is to refi a house up to 31% of a borrowers income. If the borrower is a two income household, and one income is lost, will the house be refied to 31% of only that one income? That could be a huge swing in payments!"

great...incentivize unemployment. don't walk away from your house, walk away from your job!

Submitted by Nor-LA-SD-guy on March 12, 2009 - 6:43pm.

A little off topic for this thread,

IMO ,

The way the News media and the Internet tend to hype everything bubbles and busts included

Also the internet and Globalization just in time manufacturing the whole thing.

I think that is the only economic cycles we can have now will be bubbles and depressions,
I think we will always be in either an economic bubble or a depression from now on, just make sure you always have the resources to get you through the next depression (during the next bubble) and you will make it out ok I think.

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