More than one million homes are in foreclosure. That breaks a record nearly 30 years old. Foreclosures are ripping into the ranks of home owners at a greater rate than perhaps any other time in history. You'd think all those homes would be available at reduced prices. Maybe they are, but new buyers can't land loans because of conditions that led to the foreclosures. It's an ugly, vicious cycle that won't let up.
by Broderick Perkins
© 2008 DeadlineNews.Com
Deadline Newsroom - Foreclosures just won't go away.
It's like a really bad horror movie.
RealtyTrac said late last week, foreclosure filings in May were up 48 percent from a year ago.
One in every 483 mortgage households received a foreclosure filing during the not-so-merry month of May
RealtyTrac's foreclosure filings include default notices, auction sale notices and bank repossessions. In May, they were at the highest level they've been since RealtyTrac began tracking them in January 2005.
May was the 29th straight month of year-over-year growth in foreclosure activity.
A week earlier, the Mortgage Bankers Association said the more than 1 million home owners who faced losing their home in the first quarter this year was the greatest number since the association began compiling figures nearly 30 years ago.
In the association's report, about 2.5 percent of home mortgages were in foreclosure during the first quarter. That was up from nearly 1.30 percent a year ago.
Another 6.4 percent of home mortgages were delinquent, but not yet in foreclosure. Last year it was only about 4.8 percent, the association reported.
RealtyTrac said Nevada, California and Arizona had the highest state-level foreclosure rates, followed my Michigan and Ohio. Also in the Top 10 were Georgia, Texas, Illinois, Nevada and New Jersey.
The bankers' association said the problem isn't just adjustable rate mortgages (ARMs) resetting to high rates. More than 60 percent of the loans entering foreclosure are adjustable-rate mortgages, but many of the loans went bad before the rates reset.
Homeowners with tarnished credit who have subprime loans with adjustable rates were hardest hit.
The growing abundance of foreclosures is pushing down home prices, but tight credit, generated by so many failing loans, continues to make it tough for many to get approved for a home mortgage.
Interest rates have also been edging up.
It's just an ugly, vicious cycle that shows no sign of letting up.
You want happy real estate news? Run away with the circus and live under the big tent.
An unscientific, ongoing DeadlineNews.Com poll, "News That Hits Home Survey -- When Will Housing Recover," featured on this blog page, found that among 170 Deadline Newsroom readers who took the poll, the majority (61 percent) believe housing won't recover before 2010 or later.
Those voting for a 2009 turnaround represented 25 percent of the vote.
Another 11 percent think the market will recover this year.
Pour me a glass of their optimism.
© 2008 DeadlineNews.Com
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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.
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Tuesday, June 17, 2008
Foreclosures Rip Into Home Ownership
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