Latest Foreclosure Numbers

By Alan White

New foreclosure filings declined a bit from about 200,000 in July to about 180,000 for September, according to HOPE NOW's latest data.  Completed foreclosure sales likewise leveled off at around 90,000 monthly.  While HOPE NOW reports a continuing increase in monthly modifications, to a high of 98,000 in September, servicers are still filing almost twice as many foreclosures as loan modifications.  HOPE NOW also is combining all forms of loan modifications in its numbers, including term extensions and recasting of arrears that result in higher monthly payments and mortgage balances.  Nevertheless, the significant increase in September mods is welcome news, and may reflect in part some of the FDIC's efforts with the IndyMac portfolio, and/or the implementation of the state attorneys general settlement with Countrywide/BankofAmerica.

Meanwhile, RealtyTrac is reporting a dip in foreclosure starts for September compared with August, running at a level of about 250,000 monthly (their sample and counting method are different than HOPE NOW's).  The credit for this, however, does not go to any Federal initiative, but to the states.  California saw a 50% drop in foreclosures from August to September, because of a new state law effective in September that requires lenders to contact homeowners 30 days before starting foreclosure.  Similar laws have also been implemented in New York and North Carolina, among others.  On the other hand, the various state initiatives provide only temporary relief, and numbers will probably climb again after the initial wave of foreclosure postponements passes.  The state measures can provide homeowners and servicers breathing room to negotiate more restructurings, but all evidence is that it will take far more than 30-day or even 90-day delays to insure that preventable foreclosures are prevented.

The number of seriously delinquent mortgages, meanwhile, is still growing, and stands at more than 2.2 million, not counting foreclosures in process, bankruptcies and REO.  The pipeline of future foreclosures continues to grow at the rate of 150,000 or more per month.

 

A final note - the HOPE NOW press releases include repayment plans in their total of foreclosures prevented.  Short term repayment plans are frequently not successful, and many homeowners have entered into more than one such plan, or have a repayment plan before they get a modification agreement, so in my view the grand total of "foreclosures prevented" reported by HOPE NOW is probably misleading.

Comments

[Chrisparker]

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[austin jackson]

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[Ray Ritchie]

Great article. You hit the nail on the head. Most pre-foreclosure homeowners freeze like a deer in the headlights and have no clue as to where to turn for help.

[Frederick A Neustein]

The numbers are unbeleiveable. Most people do not realize that they can stop foreclosure even if they stopped paying their mortgage. Many recent cases have been filed improperly and an experienced attorney can assist with the identification and filing of substantive and procedural defenses with the court and vigorously defend your case. Due to the lender's actions, omissions or other facts surrounding your case, you may be able to stop making mortgage payments and stay in your home while your attorney vigorously defends your property. This does not necessarily mean that you will not have to pay the loan back or completely Stop Foreclosure. It is possible to completely Stop Foreclosure if the bank or lender is in violation of the Florida Unfair Lending Act or other predatory lending practices. If the lender has committed such a violation, the entire principal and interest balance may be waived and the mortgage may be voided. This may not be relevant in your case. But, at the very least, a successful defense can do is buy you precious time to:

* Stay in your home
* Negotiate a work-out with the bank
* Sell your home for a fair price
* Refinance your home at a fair rate
* Continue to collect rent on the property
* Apply for a Court Ordered repayment plan
* File a Chapter 13 or 7 Bankruptcy

When home owners are faced with the reality of facing a potential foreclosure, many experience a state of paralysis. They don't know what to do. Selling the home may not be an option since the equity appears to have vanished. To fight foreclosure or not? That is the question. Clouding the answer is perhaps the biggest misconception, "Hiring an attorney is not a cost-effective option." If I can't afford to pay my mortgage, then how in the world can I afford to hire a competent attorney? And why should I, if I am upside down in my home? First of all, EVERYONE can and should hire an attorney to represent them in their foreclosure case. There are many competent attorneys who specialize in this area. Due to the growing number of these cases, many attorneys have become "experts" in this area. Due to the fact that most of these cases are very similar, many excellent attorneys have experienced staff and can offer extremely affordable payment arrangements. Most people don't know that once the foreclosure proceeding has started, the bank will not accept any future mortgage payments - doing so may adversely affect their ability to foreclose on your property. Furthermore, the bank pays any delinquent real estate taxes and the insurance on the property. In summation, once the bank files a foreclosure lawsuit, most of the homeowner's expenses are being paid by the bank (mortgage, taxes and insurance). However, as the legal owner of the house with full possession, you have all the rights associated with same including residing in your home, collecting rents on the property, etc. Imagine the "EQUITY" you can save / build, if you fight the foreclosure case for a year or more. The cost of qualified legal representation is a drop in the bucket compared to your typical home ownership overhead. Time is money and the real estate and financial markets are likely to turn around. The hiring of the right attorney will save you thousands of actual dollars, in addition to thousands in time value of money. Its really a no-brainer.

Respectfully,
Frederick A Neustein