Thread: Sept. Foreclosures U.S. Housing Recovery = 95,364

Foreclosures Continue to Hit U.S. Housing Recovery

Housing-Market / US Housing
Oct 05, 2010 - 06:49 AM

By: Money_Morning

Don Miller writes: Banks seized more homes in August than in any month since the housing bubble burst in 2007, even as the number of homes entering the foreclosure process dropped for the seventh month in a row, according to data compiled by RealtyTrac Inc.

In all, banks repossessed 95,364 properties last month, up 3% from July and an increase of 25% from August 2009, RealtyTrac said. August was the ninth month in a row that the rate of homes seized by banks increased on an annual basis. The previous high was in May.

Additionally, almost one-quarter of all U.S. home closing transactions involved properties that were in some stage of mortgage distress and sold at a 26% discount on average in the second quarter.

The discount reflects the average sales price of homes in the foreclosure process compared with properties not in distress, according to RealtyTrac. About 24% of all homes sold were in some stage of foreclosure, down from 31% in the first quarter.

"We're still clearly building up more distressed inventory," Rick Sharga, RealtyTrac's senior vice president, said in a telephone interview with Bloomberg News. "That will either put downward pressure on prices or keep them from going up."

A total of 248,534 homes sold in the second quarter had received a default or auction notice or been seized by banks, RealtyTrac said. The number was up 5% from the first quarter and down 20% from a year earlier.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

Sales of homes in mortgage distress probably will account for one-quarter to one-third of all transactions through 2011, up from one 1%-3% before the housing crisis, Sharga said.

Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April.

Banks are seizing more homes to clear out their backlog of bad loans and will eventually be forced to put those homes up for sale. But they are wary of dumping too many homes on the market at once for fear it will cause prices to implode.

"These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer's market with too much distressed inventory for fear of what it would do for house prices," Sharga told The Associated Press.

As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer.

The number of properties receiving an initial default notice - the first step in the foreclosure process - slipped 1% last month from July, but was down 30% versus August last year, RealtyTrac said.

After peaking in April 2009, initial defaults have fallen on an annual basis for seven consecutive months.

However, the number of homes up for auction for the first time increased 9% from July and rose 2% from August last year. If they don't sell at auction, these homes typically end up going back to the lender.

In all, 338,836 properties received a foreclosure-related warning in August, up 4% from July, but down 5% from the same month last year. That translates to one in 381 U.S. homes.

Properties in default or scheduled for auction sold for an average discount of almost 13%, down from 16% in the previous quarter and 19% a year earlier. These homes are often sold in short sales, where lenders accept less than the outstanding loan amount for the property, RealtyTrac said. Sales of properties either in default or headed for auction accounted for 9% of all transactions.

The average price was $154,147 for bank-owned properties and $204,932 for homes in default or scheduled for auction, RealtyTrac said.

Nevada had the highest proportion of distressed sales of any U.S. state in the second quarter, with 56% of all transactions involving properties seized by banks or at risk of foreclosure. Arizona ranked second at 47%, while California was third at 43%.

Source : http://moneymorning.com/2010/10/02/housing-recovery/

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Housing Crash News

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Wed Oct 6 2010
Marin, CA house values sink (marinij.com)
Housing Inventory Climbs Again In September (blogs.wsj.com)
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Banker's Foreclosure Fraud Threatens a New Financial Meltdown (thepennsylvaniaprogressive.com)
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Tue Oct 5 2010
A Mammoth One in Five Borrowers Will Default; Jumbo Mortgages Plummet (housingstory.net)
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Sellers pulling houses off O.C. market (lansner.ocregister.com)
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California Has to Delay Bills to Avert IOUs (bloomberg.com)
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Foreclosure numbers poised to rise again (nctimes.com)
A Way Out For Houseowners In Trouble Hits A Snag (npr.org)
Are The Legal Foreclosure Problems Working In Banks' Interests? (butthenwhat.com)
Banking's New Bailout (newsweek.com)
Why monetary policy can't revive housing (boston.com)
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Lessons From Ireland's Real Estate Crisis (fool.co.uk)
Bankrupt originators paid in full can't foreclose (4closurefraud.org)
3 Banks Freeze Faulty Foreclosures (video - abcnews.go.com)
Health insurers throw support behind Republican candidates (latimes.com)
S. Carolina Lawmaker Introduces Legislation To Substitute Gold, Silver Coins For Dollar (dailybail.com)

Mon Oct 4 2010
Congress puts rest of America on the hook for overpriced Calif. houses, again (cnbc.com)
Las Vegas faces deepest slide since 1940s (msnbc.msn.com)
Pensacola, FL housing market hits slide (pnj.com)
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My Turn: Bring the Big Banks to Justice (newsweek.com)
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The High-End Real Estate Holdouts (online.wsj.com)
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Price slide likely to continue as shadow inventory comes to light (chicagotribune.com)
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When Foreclosure is a Good Option (money.usnews.com)
Ohio Foreclosures and How They Work (stockmarketsreview.com)
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More Hawaii houseowners doing short sales to avoid foreclosure (staradvertiser.com)
Kaboom! Referral of Chase to federal prosecutor (4closurefraud.org)
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Thu Sep 30 2010
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Money manager Bruce Fred Friedman arrested in France, faces fraud charges (latimes.com)
Open Dissent at the Fed: Charles Plosser Philly Fed Opposes QE2 (Mish)
Economic Outlook and the Current Tools of Monetary Policy (minneapolisfed.org)
Prominent Tiburon, CA realtor dead in apparent suicide (marinij.com)

Wed Sep 29 2010
House Prices to Take Hit Next Year in Many Markets (nytimes.com)
Newport Coast land in foreclosure $6 million (mortgage.ocregister.com)
SF Bay Area Housing Graphs (patrick.net)
5 reasons why renting in California today makes sense over buying (doctorhousingbubble.com)
Hawaii residential subdivision heads for auction (staradvertiser.com)
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Case Says Housing Will Grow Slowly After Free-Fall (bloomberg.com)
Tax auctions look 'like government-sponsored loan-sharking' (bnd.com)
QE Engine Revs, Car Goes Nowhere (Mish)
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U.S. Household Income Falls for 2nd Straight Year (bloomberg.com)
Savers told to stop moaning and start spending (telegraph.co.uk)
China illegal immigration: Vietnamese pour into China seeking work (latimes.com)
Former bank rep gets the runaround from Capital One (latimes.com)
The Left Right Paradigm is Over: Its You vs. Corporations (ritholtz.com)

Tue Sep 28 2010
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Credit Scores May Hamper Housing Inflation (blogs.wsj.com)
Foreclosure Flaws May Slow House Price Fall, Delay Recovery (bloomberg.com)
Calif. houseowner optimism plummets (lansner.ocregister.com)
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Housing less affordable in Ontario (yourhome.ca)
House prices fall across all of England (telegraph.co.uk)
Chinese Property Bust Like Cooking Crabs (bloomberg.com)
China: Proudly Demolishing Buildings Before Completed (zerohedge.com)
Raters Ignored Proof of Unsafe Loans (nytimes.com)
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What the Rich Don't Need (nytimes.com)
Hedge Fund Crackdown May Snare European Real Estate Investors (bloomberg.com)
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Zombie Bank Song (dailybail.com)

Mon Sep 27 2010
Denver high-end housing market falling (denverpost.com)
New US House Sales Hold at Second-Lowest Level Ever (bloomberg.com)
August house sales rebound will be short lived (housingwire.com)
House sales on pace to finish year as bad as 2009 (finance.yahoo.com)
Housing Prediction: Bottom in 2014, Then Decade of Stagnation (Charles Hugh Smith)
Only one fix for housing crisis (hotair.com)
Walking away with less (washingtonpost.com)
LA housing bubble not dead yet (patrick.net)
Condo prices plummeted in Florida (gainesville.com)
Gung-ho' house repo agents change the locks even before foreclosure (miamiherald.com)
Tax credits leave housing inventory higher, not lower (newsok.com)
Australian housing bubble debate boils over (au.finance.yahoo.com)
To buy or not to buy? The Japanese Experience (japantimes.co.jp)
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What does it cost to produce an ounce of gold? (from 2009) (miningweekly.com)
Shopping Patterns Show When the Government Checks Come In (Mish)
Average property-price gap in US cities varies by more than $1M (guardian.co.uk)
Widening gap between rich and poor Americans (sfgate.com)
The Angry Rich (nytimes.com)

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