Foreclosures: new wave is coming in 2012

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CHRISTIAN SCIENCE MONITOR

BY DIANA OLICK

Despite a seasonal slowdown in overall foreclosure activity, and a process still bogged down and backed up by the “robo-signing” processing scandal, the U.S real estate market is about to be hit by another surge of bank repossessions, according to a new report from the online foreclosure sale site RealtyTrac. As banks resubmit millions of documents and courts begin hearing cases again, the backlog of over four million delinquent loans will start surging through the pipeline again.

 “November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs [bank repossessions] or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.”

 Foreclosure auctions, where the property is sold at the courthouse either to an investor or in most cases back to the bank, reached a nine-month high in November, which corresponds to a recent surge in default notices, the first stage in the foreclosure process, back in August. Troubled borrowers will get a reprieve over the holidays, as mortgage giant Fannie Mae says they will not evict anyone until after the new year. A spokeswoman, however, stressed that foreclosure processing would continue through the holidays, so as not to slow the system down any more than it already is.

 Nevada is still in the number one spot nationally for its foreclosure rate, despite artificially low activity caused by a new state law that changes the process, requiring more documentation. It has held that dubious honor for 59 straight months. Both Georgia and Utah saw substantial monthly increases in their foreclosure rates, lifting them into the nation’s top five in November. Nine out of the nation’s 10 highest foreclosure rates among metropolitan areas with a population of 200,000 or more were in California, according to RealtyTrac, with just Las Vegas making its way into the number six spot.

Other states, like New York and New Jersey, are still seeing huge delays in the foreclosure process–986 and 984 days respectively, says RealtyTrac, but they too are starting to ramp up, as various moratoria have been lifted and judges have made rulings that will kick-start the process. That will mean more distressed properties surging into an already troubled housing market. Foreclosure starts outnumber sales by three to one, and 45 percent of foreclosure starts in October were repeat foreclosures, according to Lender Processing Services.

 While overall inventories of homes for sale have been dropping somewhat steadily over the past year, these new distressed properties will put increasing downward pressure on home prices nationally. The hope is that there are enough investors at the ready to buy these properties quickly, as they seek to take advantage of a growing rental market. Government agencies are considering a plan to sell repossessed homes from Fannie Mae and Freddie Mac in bulk to investors, but there has been little movement of late. Bank of America, which took over the troubled loans of Countrywide Financial, is setting a plan in motion to sell its repossessed homes to investors, who would then rent them back to the original borrowers. Both government and the private sector know that until the backlog of distressed properties is cleared, the housing market will have little chance of regaining a solid footing.

 

6 Responses

  1. It was a mistake to think all this would go away once “people who bought too much house” and “people who used the house as an atm” were booted out of house and home. It is a mistake to think that speeding up this process now will make it all go away now. Now no one can afford to buy and no one has equity they can bank on and it will be the case for decades. More and more are unemployed and can’t pay. The jobs are not coming back. Party is over. The 1% needed to keep people in homes and paying on time. They can’t survive without it. They bit the hand that feeds them.

  2. @Carie,

    That’s why the worse it gets and the least we have to fear: the banks are literally cornering themselves into a position they won’t be able to sustain.

    As a matter of fact, banks are running scared. They know their days are counted.

  3. Lest we forget…this is what the banksters/Wall Street/government did to us…and they continue to make a horrible situation worse:

    1 IN 7 AMERICAN HOUSES ARE EMPTY.

    1 IN 402 AMERICANS ARE HOMELESS.

    24 EMPTY HOUSES ARE AVAILABLE FOR EACH HOMELESS PERSON IN AMERICA.

  4. If it happens to you, fight. every single piece of paper, motion, whatever, being sent to you or to court. Contest everything. That will buy you time. Force the case into court if you can. File if you’re in a non-judicial state to delay the process: remember that you have NOTHING to lose by fighting and EVERYTHING to lose by doing nothing. If you ask for nothing, you’ll get exactly that. I’d rather ask for 3 millions and get 10% of it than ask for nothing and get all of it. Think that way.

    Contact OWS and see if they have contacts with pro bono agencies in your area. Go after all the help you can get from everywhere. Contact ALL the government agencies currently involved in foreclosures: OCC, HUD, everyone. Be a squeaky wheel since those are the ones getting all the grease.

    Even if you do get foreclosed on, don’t leave the house. By the time the foreclosure is finalized, half America will have gone through it or know someone directly affected. Stay put and don’t leave the house. States are laying off cops, sheriffs and other public servants for want of money. Banks are cornering themselves into having thousands of foreclosures on paper and absolutely no way to have them enforced. They’ll be responsible for the taxes and the maintenance and you won’t pay a cent and will live rent free for a while.

    Participate in one of the OWS chapters. The more you do with them, the more help you’ll get from them.

  5. While the Christmas House is Sleeping.

    When times are tough,
    And friends are near,
    And the Spirit of Christmas brings us to here:
    T’z the Season of all Good Cheer!
    And that of Graditude,
    Knowing how dear.

    Merry Christmas from Anneli, Ken and Zedo, 2011

  6. The lenders should have to post the full amount with the trustee or referee at the auction if they want to bid the lien. Let them try to introduce real money instead of continuing with leverage.

    Quick question, if the alleged note holder gets it to the steps, how does the ref / trustee convey for 10.00 to bank instead of making them post the full amount to pay the certificate holders.

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