October Foreclosure Crisis Update

By Alan White

October’s mortgage securities investor reports are out and the news is discouraging.  The foreclosure inventory is unchanged and modifications are still down from earlier this year.  There is little evidence that Treasury’s Home Affordable modification program is yielding more permanent modifications than were being done before.  We’ll know more when Treasury releases their October numbers in the second week of November.

The data also continue to show wide random variation among mortgage servicers.  Some are modifying a lot, and some are foreclosing a lot.  The chart above shows raw numbers of modifications and liquidation sales from the October (9/25-10/26) Columbia collateral file (not all servicers are represented), which covers about 5% of mortgages and 20% of foreclosures nationally.

For this month’s update I also looked at how different states fared in good and bad outcomes.  The second chart shows the number of modifications and final foreclosure liquidations (resales after foreclosure) in the October Columbia report.  The “sand states”, CA, NV, FL and AZ, all show higher rates of post-foreclosure sales and lower rates of modifications.  Pennsylvania, North Carolina and New York are the only states with significantly more modifications than post-foreclosure sales.  Perhaps this is some indication that the aggressive mediation programs in those states are working.  Affordable home prices might explain Pennsylvania, but perhaps not New York or North Carolina.

Comments

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[Tax Liens]

Perhaps this is some indication that the aggressive mediation programs in those states are working. Affordable home prices might explain Pennsylvania, but perhaps not New York or North Carolina.

[Renee]

November's data is not much better. Know things are still in a slump in FL. Found some good articles on blog at http://www.joncoatslaw.com/blog