Archive for September, 2007

Sep20th

Foreclosures By The Numbers. What’s Happening Across The Nation?

Thursday, September 20th, 2007

Heading into the final quarter of 2007 the nationwide can only be described as bleak at best. There is news from some camps stating that with exception of Florida, California, Arizona, Nevada, Michigan, and Ohio the overall foreclosures filings, while currently showing 36 percent higher overall than this time last year, are down. Other sources point out that the worse may be yet to come as a new wave of filings seems to indicate another wave of foreclosures is till in the offing. 


The numbers do not lie as they say and as of the end of August 2007 RealyTrac is reporting the following statistics-

  • 243,947 foreclosure filings (includes default notices, auction notices, and bank repossessions) in August, compared with 179,599 in July and 113,300 in August 2006.
  • One in 510 homes nationwide currently in some state of foreclosure.

Some experts point out that October may be the peak month with some 50 billion dollars in mortgage loans set to increase.  

Two regions, the Sunbelt and Midwest, are responsible blamed for the bulk of the country’s foreclosure filings. The Midwest has been hit hard due to the high level of job loss associated with plant closings. The Sunbelt, comprising California, Arizona, Colorado, Texas, Louisiana, Mississippi, Alabama, Florida, and Georgia, have contributed to the crisis by the way of over-inflated real estate prices brought by earlier real estate speculation that went largely unchecked for several years.

Of all states California leads the pack with one in every 224 households and some 57,975 households in some stage of default during the month of August. In fact

California has six cities ranked among the 10 metro areas.

Modesto led the way with one of every 79 households. Stockton, Merced, Vallejo-Fairfield, Riverside-San Bernardino and

Sacramento also hit the top 10.

The root cause of the problem can be pinpointed back to when the real estate market was growing by leaps and bounds. Many homeowners were able to avoid home foreclosure by tapping into their equity thus enabling them to sell their properties at a profit or refinance and use the money to pay off past loans.  Far fewer homeowners are in that position currently. Because of the many are barely keeping their heads above water, as more people discover they owe far more on their homes than they are worth. Very few have the resources they need to work out their debts and stop foreclosure. 

The coming months will tell the tale as adjustable rate mortgages reset and monthly mortgage payments increase. More and more homeowners will find themselves unable to pay their mortgages and having to look for ways to stop foreclosure and keep their homes. Only after the dust settles will we be able to step back and fully access the overall damage to the economy.

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Sep17th

In Washington State Foreclosures Increased But Still Outperformed The National Average

Monday, September 17th, 2007

The news out of Washington State shows an increasing number of foreclosure filings, but when compared against the average nationally the state is holding its own. In fact the percentage gap seems to be widening when compared to other states. While foreclosures were up 22 percent over the same time last year Washington State ranked 49th for foreclosures.

What happened here to alleviate the same foreclosure dilemma gripping the rest of the country?

The likely cause is the percentage of sub-prime loans is much lower in Washington State than the national average, coming in at 15 percent and 21 percent respectively. Even with the smaller percentages the state still saw adjustable rate loan delinquencies up 22 percent higher over year while foreclosures rose to over 78 percent.

Has WashingtonState avoided the worst of the foreclosure crisis?

There is still the very real problem where thousands of homeowners trying to stop foreclosure in Washington State have fewer and fewer options to choose from. This can be directly linked to the predatory tactics used by sub-prime lenders during the real estate heyday.

Some Washington State homeowners were suddenly seeing their property values shoot upwards of 40, 50, even 100 percent or better over a relatively short amount of time. In some cases homes gained tens of thousands of dollars, or more, in equity. For many this occurred in a few short months. Couple this with the greed of a few lenders and you had the groundwork for a catastrophe. This scenario proved far too tempting for both homeowners and some lenders.

It was suddenly too easy for homeowners to plunder this newly found source of cash. Unfortunately few, if any, lenders practiced the proper due diligence in qualifying prospective lenders. At one point it seemed all a borrower had to prove was they were upright and taking nourishment. Granted this a tongue in cheek comment, but lending rules were loose and fast during this time period. Those homeowners who drained every last dime from the equity in their homes are now facing the reality of their poor planning. Now thousands of homeowners are looking for help to stop or avoid foreclosure.

The Evergreen State seems to be weathering the worst of the storm for the most part. Home values are steady, and even rising in some areas. Mortgage default and foreclosure filings are decreasing. If this trend continues

Washington

State may escape relatively unscathed.

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