More on the foreclosure front- a lot more: [Thanks G!]
July 25 (Bloomberg) — U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.
One in every 171 households was foreclosed on, received a default notice or was warned of a pending auction. That was an increase of 121 percent from a year earlier and 14 percent from the first quarter, RealtyTrac Inc. said today in a statement. Almost 740,000 properties were in some stage of foreclosure, the most since the Irvine, California-based data company began reporting in January 2005.
“Rising foreclosures are putting downward pressure on prices, increasing the possibility that homeowners will go upside- down on their mortgages,” said Sheryl King, chief U.S. economist at Merrill Lynch & Co. in New York. “That will cause more losses in mortgage portfolios and less willingness from investors to securitize mortgages and therefore fewer mortgages.”
Which would mean more foreclosures. The cycle continues.
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“I have not personally seen a lot of properties go into foreclosure from unemployment,” Ryan said.
The primary reason is that homeowners are giving up on their properties because prices are so low that they can’t envision making money off their home for at least five years, he said.”
http://www.azcentral.com/news/articles/2008/07/22/20080722ev-foreclose0723.html
RENTERS BEWARE
The new trend is for homeowners to convert their current home to a rental and Buy a cheaper bigger home and then walk away from their “old investment”.
Rents are losing their deposit and getting the foreclosure notice. Renters used to be the ones leaving a deposit, these days Renters need to make sure their lessor has 6 months of reserves or 30% equity in their home before signing a lease.
RENTERS BEWARE: When the deal sounds too good to be true, It is.
1,000/mo on a home that cost 400,000 in 2007. 6 months later you come home to find locks on the door. The lessor took your 9months in rent and deposit but stopped paying the mortgage after 90 days. Investor up $10,000; rentee out on the street.
they’ll tell you that there’s been 1.4 mln in the first half of the year, but don’t you love how they wouldn’t project total fc for the whole year? I realize math isn’t the RE businesses best subject (I think that spots’s reserved for fantasy), but come on.
Coffee-
In Maricopa County it is quite easy to check the Recorders Office and look for NOTs. My landlord was underwater, so I checked about once a month to make sure that no NOTs had been issued. Other counties aren’t always as easy to check, but for peace of mind, it is worth it.
Also in Maricopa County someone will come tape a NOT to your door if you are renting a SF home- which will also give you a 90 days heads up. If you are living in an apartment complex, no such luck. Just keep checking with the Recorders Office, and you won’t be evicted unawares.
I wonder what rampant inflation is going to do to home prices in the future.
These foreclosures are a good thing as it will help get all these garbage loans cleaned out.
Twist, that is good advise. Just want to make notice of another side of the Foreclosure problem. Owner occupied home flipping or “musical homes” with the renter finding themselves with out the seat since they forgot to listen to reality.
The NOT is one way, the other is finding out liens on the prop you are renting. Info also at the recorders via online. Most renters are not aware until too late. The lessors will tell renters the problem has been taken care of or that it is a misunderstanding with their mortgagor… until it is too late.
The housing bill tax credit for first time homebuyers is a joke. It isn’t going to make much difference. The bailout is for the corporations predominantly. Read it here Bankrate article
We are too far past the point of return to stop the inevitable continuing and increasing wave of foreclosures that will feed on itself as more and more homeowners become underwater and join the foreclosure movement.
anti-spam word is deflate, yeah buddy!
No quote from Mr. Yun letting us know that THIS signifies the bottom? Man, I feel ripped off…