ForeclosureS.com: One Million Foreclosures By Year's End [Housing Tracker]

Quotes Of The Day 

"They're going to walk away like they had made a bad portfolio decision. Some are losing $100,000 to $200,000." - Lewis Schiff, a co-author of The Middle Class Millionaire, who says one of five ‘middle class millionaires’ (with assets of $1M-$10M) will walk away from their residential investment properties. (Birmingham Business Journal, July 14^th)

"I've had to treat over 200 pools in the last three months and with these [fish] I don't need to come back." - Jon Miller a 22-year veteran technician at the Orange County Vector Control District, on the mosquito larvae-eating fish he uses to treat the abandoned pools of foreclosed homes in Orange County. (ABC News, July 14^th)

Foreclosure Data

Possible One Million Foreclosed Properties by Year's End, Says ForeclosureS.com. “ForeclosureS.com: There could be a possible one million foreclosed U.S. properties by the end of 2008. Almost a half-million homes were foreclosed in H1’08, almost double from H1’07… [A predicted] six out of every 1,000 households nationwide… REO filings for June were up 5.35% from May with 87,465 total filings. Q2 also showed a jump in filings with 224,230 filings over 210,230 REOs filed in Q1’08. Pre-foreclosure filings already surpassed the one million mark in H1’08, with 1,060,187 filings… nearly double [from] H1’07. Pre-foreclosure filings [rose to] 547,211 filings in Q2’08, up from 512,976 in Q1’08.”  (Default Servicing News, July 14^th)

'Middle Class' Millionaires Facing Foreclosure. “Lewis Schiff, a co-author of The Middle Class Millionaire: So-called middle class millionaires, those with $1M-$10 million, say they expect to lose real estate to foreclosure in the year ahead [and] 1.6% anticipate losing their primary residence over the next 12 months. Of those surveyed, 36% have a second residence for personal use and 5.6% of those expect to lose the property over the next year. Almost 45% own residential real estate as an investment, and 20% of those expect to lose their investment during the next 12 months.”  (Birmingham Business Journal, July 14^th)

Foreclosure Relief Not Reaching Entire County.  California: “RealtyTrac: Contra Costa County foreclosures dropped 4% in June from May (though it was still up 50% over June 2007). Neighboring Alameda County saw a 25% drop in June, and Bay Area-wide, the rate fell 9% from May. DataQuick: But [long suffering] Brentwood and Antioch, aren't seeing that same kind of relief. Of the 471 homes listed for sale in June in Brentwood, 130 were foreclosures — up nearly 6% from the 123 foreclosures listed in May. But because the number of houses listed for sale also rose, the actual percentage of foreclosures on the market stayed nearly the same.”  (San Jose Mercury News, July 14^th)

Foreclosures Rise, And Rental Agents Take Notice.  “Michigan: “Increases in home foreclosures in the Tri-Cities could be adding fuel to the rental housing market. Saginaw recorded 1,098 foreclosures in 2007, a 23% jump; Bay County had 403 residents lose their homes, a 9% hike; and Midland tallied 207, 6% more than the previous year. Saginaw Landlords Association President Butch Burden said those in the rental industry have taken notice.”  (Michigan Live, July 14^th) 

Even Birmingham's high-dollar homes being hit with foreclosure.  Alabama: “Birmingham lawyers and real estate agents said they have noticed a growing number of homes valued at $500,000 or more ending up in mortgage default... RealtyTrac: Since early 2007, area foreclosure filings have been concentrated in middle-class to lower-income neighborhoods. [But now in the] Inverness area in Shelby County, five foreclosed homes ranging in value from $500,000 to $1.1 million are listed for sale… The Birmingham MLS last week listed almost 1,500 foreclosed area homes for sale. Twenty-five are valued at more than $500,000, up from 17 a few days ago. Three [are] above $1 million.”  (Birmingham News, July 13^th)

Renters Swept Up In Foreclosure Storm. “Across Northwest Indiana and Chicago's south suburbs, as banks foreclose on landlords and tenants find eviction notices in their mailboxes… Some banks offer renters cash to turn over the keys and leave them an undamaged house… Some banks just kick the tenant out with no compensation. So far in Northwest Indiana, banks have not been allowing tenants to pay rent and stay in the homes. [A local realtor] has seen landlords continue collecting rent after they stopped paying the mortgage. Some will collect right up to the day of an eviction, even though they have ceased to own the home.”  (NWI Times, July 13^th)

Report: Louisiana Home Foreclosures Drop. “RealtyTrac: Louisiana recorded a 17% drop in home foreclosures in June as compared with May. Louisiana recorded 584 foreclosures last month, ranking it 43rd among all the states. The filings include default notices, auction notices and bank reposessions and not all of them will end with an owner losing a home. RealtyTrac says one in every 501 households in the U.S. received a foreclosure filing during June.”  (KATC TV, July 13^th)

S.C. Lax On Combating Rising Rate Of Foreclosures. RealtyTrac: “There were 1,063 foreclosures in South Carolina last month, for a rate of 1 per every 1,859 homes in the state. The South Carolina default rate was 168% higher than a year earlier, in June 2007. Only Vermont, Wyoming and the District of Columbia had larger rate increases over the same time period.”  (Herald Online, July 13^th)

Foreclosures In Essex County Rise Faster Than State Average.  Massachusetts: “Warren Group: Home foreclosures in Essex County soared 133% in May, surpassing the statewide average 107% increase in the number of foreclosure deeds compared with May 2007. Lynn, the largest city in the county, had 45 homes foreclosed upon in May compared with 21 in May 2007. Haverhill had 21 foreclosures for the month, compared with 13 a year ago. Peabody had eight homes foreclosed upon, compared with just one in May 2007. Salem also had eight home foreclosures, up from three for May 2007” (Boston Globe, July 13^th)

Nevada Family Of 14 Faces Foreclosure.  Reno: “Dave and Kathy Bain are facing foreclosure on their home after falling behind on payments… The Bains moved into the house in January 2007 – six months before they adopted nine of [their twelve adopted] children, including eight siblings. The couple… wasn't able to rent out their previous, smaller home until last September... With their old house rented, Kathy said they now are able to make payments on the new house. But their lender, GreenPoint Mortgage, is foreclosing because they're behind $20,000 in payments… They applied for hardship assistance, but were denied last month. The sale date has been scheduled for July 30.”  (Sign On San Diego, July 12^th)

Utah Is No. 10 In Foreclosures. “RealtyTrac: Utah now has the country's 10th highest home foreclosure rate, one in 600 households... In June alone, 1,501 households received some type of foreclosure-related filing, up 141% from June 2007… With the state enjoying one of the country's strongest economies in recent years, the rate of Utahns losing homes has been low. But over the past year, employment growth has slowed significantly and the once booming real estate market lost much of its steam. Home sales in most areas are down significantly from a year ago, and Utah now faces the specter of falling home prices.” (Salt Lake City Tribune, July 11^th)

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Comments

[ANTS]

This blog is from Australia which is why it sounds naive. In more usual circumstances, if a bank forecloses in the USA, and the price of real estate was going up, then does the bank realise a profit on the loan ? or does the borrower participate in the upside. In other words, was all this "bad lending' in fact a good business proposition for banks a few years ago?

[billddrummer]

To ANTS:

It depends. Usually, when a bank forecloses, the auction amount is set to capture what's owed on the property, plus any fees attendant to the transaction. What results is no material gain or loss because typically the auction amount is less than the appraised value of the property. I know of only a handful of cases where foreclosure sales resulted in gains, and those transactions took place when real estate was rising rapidly. More frequently, losses are the order of the day.

Foreclosures are never good for lending institutions. Banks are in the business of loaning money, not managing assets. Costs for carrying repossessed properties can amount to hundreds of dollars a month, and any loans that were made earn no interest.

[armadillo]

The banks were making bad loans expecting them stay affloat just long enough for the them to be repackaged and sold off. I think they were hoping the Chinese would buy them all up.

[xmplary]

Georgia has been hit hard with foreclosures as well. Unfortunately, the bad economy, corporate losses, dollar's slide in value, high gas prices, and this being an election year aren’t helping any. I think this trend will continue for some time. With the slide in the dollar's value, one would normally expect everything to go higher, but the housing has been doing the exact opposite, which tells me that once the market corrects itself, housing will offer exceptional returns for those willing to take the long term view. As for the future and this being an election year, at least we can only hope for the better; after all, can we have a worse president than what we have now?

Take a look at the foreclosure resources I put together on my site if you or some one you know are facing the unfortunate prospects of a foreclosure.
xmplary.blogspot.com/2...

[Tom Lindmark]

builddrummer,
You wrote that the auction amount is set by the bank.

Actually, there is not set amount. The lender will typically bid whatever it is owed on the property. If someone bids one dollar more then they get the property and the lender gets paid off. If no one bids more than the lender then the lender gets the property.

[TheyKnowNothing]

So what if there are 10 million foreclosure homes...It be another 10 years when the lender/bank clerks will start working thru those docs..even if there are potential buyers...

They will move so slow..so slow that the market will not see enough 'buyable' properties. Price will remain strong instead...Slowsky could well be a strategy by the lenders/banks.

The Fed had a chance to made it right. Prevent the lenders to reset the mortgage rate (i mean, yes, punish the lender - they will survive, just less income)...allow the use of 401k (or even suspend our failing social security) & SS by the owners to pay monthly mortgage...it didnt happen. If lenders were then to tighten the lending to the market, the property prices will correct itself

[billddrummer]

To Tom:

Thank you for correcting me. I meant to say that the initial bid is typically the amount owed, just as you described. That amount can include other costs incurred (filing fees, attorney's costs), not just the outstanding loan balance. But you're right that the property goes back to the lender if no one bids higher than the opening bid.

Thanks again for the clarification.

[ANTS]

Thanks guys for the above response to my original question.

In Australia, the bank has recourse to the lender in the event that a house doesn't sell for at least the amount owed. So most people just sell out prior to being put into default.

I had an idea that, where houses double in price, as they have, that a US bank would have a good incentive to lend to people that couldn't repay, take possession a few years down the track, and then keep a substantial portion of the capital gain.