The Wall Street Journal reports that four of the major players in the mortgage marketplace -- JPMorgan Chase (JPM), Wells Fargo (WFC), Fannie Mae, and Freddie Mac -- just started increasing their foreclosure activity at the end of the quarter. So expect foreclosure numbers to take another significant jump in the second quarter.
While the foreclosure news is bad, billionaire real estate investors Sam Zell and Donald Trump think it's a great time to buy.
Zell said yesterday on Bloomberg TV that he expects the residential real estate market to reach "equilibrium" this summer and he thought homes were affordable and the market "very attractive." Trump told viewers on Larry King Live to be bold and buy real estate now.
The big unknown for the future is whether or not the Obama administration's incentive payments totaling $75 billion will entice mortgage investors and servicers to work with people and modify loans rather than foreclose. When Obama announced his plan he hoped to help as many as nine million borrowers avoid foreclosure through refinance or modification.
About 191,000 people lost their homes to foreclosure in the first quarter. The number of people who lost their homes is down thanks to the moratoriums, but that number is expected to rise through the summer now that the moratoriums have been lifted. The hardest hit states continue to be California, Florida, Arizona, Nevada, and Illinois. California alone had 230,915 filings or 29 percent of the total.
Florida filings fell in the first quarter by 12 percent from the fourth quarter. Even though the foreclosure filings appear to be slowing, there were 119,220 foreclosure filings, which makes it the second highest state in the nation. Third was Arizona with one filing for every 54 households, which is up 80 percent year over year.
Lita Epstein has written more than 25 books, including The 250 Questions You Should Ask About Buying Foreclosures.
