Foreclosures fall for third straight month, but still up 19% from year ago
Filed under: Economy
The number of homeowners on the brink of losing their homes dipped in October, the third straight monthly decline, as foreclosure prevention programs helped more borrowers.But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers - or anyone who hasn't owned a home in the last three years - would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
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Reader Comments (Page 1 of 1)
11-12-2009 @ 10:23AM
07 Shelby said...
These articles are so BS it isn't funny! Nice headline but as you read the story, you find that foreclosures haven't declined do to the economy being better but more through manipulation of facts. Only because the gov is applying political pressure on banks not to foreclose, the properties aren't worth foreclosing on or like in Nevada, banks being forced into negotiations, are delayed from foreclosures. This isn't the truth behind foreclosures, Banks are delaying foreclosure because they don't want to pay the real estate taxes on the properties. Once they foreclose, they are liable for the back taxes. Sometimes it is easier for them to just walk away from properties. I know for a fact in Virginia, a state not on the top ten or 15 for that matter, foreclosures are running rampant. I know of one law firm that recieves 400 new bank referals to start the foreclosure per day! The situation is far from getting better, it maybe getting delayed through politics and laws being hastily enacted to slow the process, but far from getting better! The situation will only get worse next year as major companies start cutting jobs big time. That's just from what companies like GM and Chrysler have disclosed, how about all the companies that are hiding what they are planning? The real estate market has not botttomed out yet and foreclosure/real estate law firms are being told by the various gov entities that the current situation is expected to accellerate and not improve until 2014. Too bad they aren't telling the general population the truth. Of course not, they want us to buy up all their crap so they can con us into making the market situation better! If you think real estate is at bargin prices now, give it a year!
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11-12-2009 @ 8:47AM
harry said...
all those that lost their home, send the bill to barney frank...frank and dodd should be cellmates.. forcing banks to give loans they never would have given. we lost half our 401k's while barneys boyfriend made millions.
11-12-2009 @ 8:56AM
L R said...
07 Shelby said...
These articles are so BS it isn't funny!
*****************************************************************
Thank You -Thank You -Thank You very much. Our bank has been told in no uncertain terms that we will extend 6-8 months to all customers in arrears. Since we received bail out money we must do what we are told.
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11-12-2009 @ 9:10AM
david50now said...
this article is all SPIN. the article says nothing about those that are unemployed and close to losing there home soon. do some research! I also note nothing said about those that were lucky enough to sell their house at near forclosure price just to protect their credit. this is BS after 6 years of paying and being current on my home i had to sell and will make alousy $100. I for one WANT to see people walking away from their homes and the banks getting stuck with the taxes and a devalued home that they have to sell at bargain basement prices! wtf igot screwed by the banks and wall street so turnaround is fair play hahahahahahahaha do some research you moron and give the correct spin on the facts......more forclosers to come AND the monthly firgues are going to rise.... NO JOB CREATION...MORE UNEMPLOYMENT....MORE FORCLOSURES... PERIOD
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11-12-2009 @ 9:53AM
Sam said...
Instead of giving the banks hundreds of $Billions because they were crooked and incompetent, but still allowing them to give themselves $Million bonuses, it should have been handled another way.
That money should have earmarked to pay off mortgages that were at risk to avoid forclosures and evicting people from their homes. The banks still would have gotten the money, reduced the deficit accounts, and been able to operate.
But then, Congress wouldn't be getting their kickbacks.
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11-12-2009 @ 10:30AM
JIM said...
Sam, I agree. Also, if the mortgages would have been caught up, then AIG and other insurers would not have had to pay the investors on the mortgage backed securities (MBS) that went delinquent. Then AIG would NOT have had to borrow all this government money. I read an article the other day tha said Fannie and Freddie own HALF of all the mortgages and since the government controls/owns Fannie and Freddie, then any foreclosure from these 2 institutions should be delayed to help stabilize the economy. The rest of the mortgages MAY fall into the MBS arena and then the court should REQYIRE the foreclosing institution to PROVE they OWN the mortgage. Read the blog at the link: http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/
11-12-2009 @ 10:00AM
Tom said...
07 Shelby:
I think you've got it right. The Feds are playing with ( and publishing) fake numbers to try to make the current administration look good.
The current foreclosures are just being delayed, not avoided. Just wait until the 6-month grace period expires and the bomb will fall. Foreclosures will go through the roof.
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11-12-2009 @ 10:06AM
George said...
I have come to believe in changes, false information, false reporting. Exagoration of numbers. Politicians have no answers to our problems. Americans are going to have to fix this. Reduce government size, stop waste. Place elected officals on social security and the health reform they so voted on. Lay off 50% of the Senate during these hard times would send a real message. Petitions are our only way of voicing our intentions and we should get started. Joe Biden stopped in Reno to campaign for Harry Reid in Air Force II (747) Abuse at the extreme..
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11-12-2009 @ 11:56AM
Randy said...
The O'Bama recession is far from over. His incompetence, fiscal irresponsibility, and recklessness will probably drive this country to "rock bottom" before things get better.
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11-12-2009 @ 5:50PM
JIM said...
This was removed once from this article and from others. I wonder why someone keeps removing this from the Daily Finance section.
If you are in or near foreclosure, you should possibly consult a real estate attorney using the following information.
BACKGROUND
Mortgage-backed securities (MBSs) are simply shares of a home loan sold to investors. They work like this: A bank lends a borrower the money to buy a house and collects monthly payments on the loan. This loan and a number of others are sold to a larger bank that packages the loans together into a mortgage-backed security. The larger bank then issues shares of this security, called tranches ( slices), to investors who buy them and ultimately collect the dividends in the form of the monthly mortgage payments. These tranches can be further repackaged and sold again as other securities, called collateralized debt obligations (CDOs). Home loans were so divided and spread across the financial spectrum, it was possible a given homeowner could unwittingly own shares in their own mortgage.
Eventually, the most desirable, qualified customers dried up; they all had homes. So banks turned to less desirable customers that they had traditionally shunned -- subprime borrowers. These are borrowers with low credit ratings who pose a higher risk of defaulting on their loan. But all types of lenders bent over backwards in the early 2000s to get this type of borrower into homes. The no-document loan was created, a type of loan for which the lender did not ask for any documentation and the borrower did not offer any information. People who may have been unemployed may have received loans for hundreds of thousands of dollars.
One answer is that, with the introduction of MBSs, lenders no longer assumed the risk of a loan default. They simply issued the loan and promptly sold it to others who ultimately took the risk if payments stopped. And since early MBSs performed well based on mortgages granted to the more dependable prime borrowers, investors clamored for more. In response, lenders loosened their restrictions for mortgage applicants and borrowed heavily to create cash flow for loans in order to create more mortgages. After all, without mortgages, there are no mortgage-backed securities.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
MERS FORECLOSURES http://www.mersinc.org/Foreclosures/index.aspx
Mortgage Electronic Registration Systems, Inc. (“MERS”) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements.
In mortgage foreclosure cases, the plaintiff has standing as the holder of the note and the mortgage. When MERS forecloses, MERS is the mortgagee and it is the holder of the note because a MERS officer will be in possession of the original note endorsed in blank, which makes MERS a holder of the bearer paper. MERS will not foreclose unless the note is endorsed in blank and held by MERS.
The MERS Legal Primer provides a sampling of cases that address the standing of MERS to foreclose its mortgages. These cases are not meant to be an exhaustive list involving MERS but are merely to serve as a primer for the legal arguments. These statements are from the MERS website.
THE QUESTIONS
As mortgages were packaged/bundled into mortgage back securities (MBS) and sold to investors and since these MBSs were bought by investors, with some mortgages being split and owned by several institutions or people (tranches), how can the homeowner/borrower know who actually owns their mortgage? If the homeowner /borrower does not know who actually owns their mortgage, then how does the foreclosure court know who actually owns the mortgage and CAN actually proceed with the foreclosure? I would say if it is not the company listed at the county and they were paid off when they sold the mortgage, and then a release of lien should be requested for the homeowner. The real estate attorneys representing these possible foreclosed homeowners should request that the foreclosing institution show that they ACTUALLY own the mortgage and can bring foreclosure action to court and are not just the mortgage servicer. See this blog for more info: http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/
*** Also, since these mortgages were sold without registering the mortgage in the county, the county has lost doc stamps (tax monies) and who /whom really owns the mortgage.
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11-12-2009 @ 6:23PM
Joe said...
The legacy of George W. Bush continues unabated. Pain and suffering; foreclosures in record numbers; loss of retirement funds; unaccountable TARP monies distributed to big business; deaths of fine men and women fighting in two useless wars, neither of which has any reasonable conclusion in sight.
Why, I ask, was this absolute MORON elected president?
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