Unemployment Causes More Foreclosures

High Levels of Unemployment Deepen the Foreclosure Crisis

The foreclosure crisis continues to get worse as a slow job market forces many homeowners into the worst financial situation of their lives.

In cities like Seattle, Houston and Chicago, who seemed to be dealing with the foreclosure bust quite well, are now having a more difficult time keeping up with their mortgage payments.  Many have already seen their homes repossessed by lenders.

All told, foreclosure activity jumped in 149 of the country’s 206 largest metropolitan areas last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

Questions Regarding Your Home?

Unemployment has been the main cause of foreclosures, rather than the time-bomb mortgages resetting to higher payments.

Just to show you a quick example of what I am talking about:

The Houston-Sugar Land-Baytown metropolitan area in Texas saw its foreclosure rate jump 26 percent from 2009, the largest increase among the top 20 biggest metro areas, the firm said.

Still, foreclosure activity in many of the metro areas in these states actually declined last year.

Three California metro areas posted among the biggest annual drops in foreclosure activity: Riverside-San Bernardino-Ontario, down 20 percent; San Diego-Carlsbad-San Marcos, down 17 percent; and, Los Angeles-Long Beach-Santa Ana, down 16 percent.

A large reason for the reasonable decline is that lenders took steps to delay foreclosure actions in these states as they sought to manage the flow of troubled properties coming onto their books. In the closing months of last year, several lenders went further, temporarily halting foreclosure activity to deal with allegations of improper evictions.

Currently many of the banks have resumed their foreclosure activity, and have begun taking action once again.  The pace of foreclosures is expected to pick up this year and most definitely outpace the rate of foreclosures from 2010.

We will most likely see the values of homes plummet even more so this next year.  More borrowers will be in negative equity this year, forcing more foreclosures.

Lenders took back 1 million properties in 2010, and no metro area saw more homes repossessed by lenders than Phoenix-Mesa-Scottsdale in Arizona.

Some 55,372 properties were taken back by lenders there last year, up 17 percent from the year before.

The Chicago metro area was second, followed by the Detroit-Warren-Livonia metro area in Michigan. Its home repossessions rose 19 percent.

1 Million Homes Reposessed

1 Million Homes Reposessed in 2010

The number of foreclosures that we saw in 2010 was astronomical.  There were over 1 million people who lost their home! Realtytrac reported close to 2.9 million foreclosure notices.

Nevada has led the pact with foreclosures for the fourth year in a row.  One in every 11 homes received a foreclosure filing.

Overall, 2010 was a rough one for the mortgage industry. The big news was the robo-signing scandal, which erupted in the fall amid allegations that banks were foreclosing on homes without having read the documentation.

In the first quarter of 2010, eyes were still focused on Obama’s HAMP program, while many analysts were still optimistic about saving their homes.  But as time progressed it was quite obvious that the HAMP program was losing the fight against foreclosures.

Then the next shoe to drop came in June, with a report from Fitch Ratings that showed HAMP modifications re-defaulting at a high clip. The company forecast that three-quarters of all HAMP mods would ultimately fail.

The next few years are looking to be very difficult on the economy and the housing industry.   Some industry analysts, such as Laurie Goodman, head of Amherst Securities mortgage group, say that as many as 11 million mortgage borrowers are in potential danger of default.

However, Rick Sharga, RealtyTrac’s spokesman, predicted 4 million to 5 million and scoffed at quantifying the magnitude of the potential disaster, comparing it to “taking inventory of deck chairs on the Titanic.”

Only time will tell, but if you have any questions regarding your home and the position you are currently in, feel free to call us at 888-877-0078.

Market Recovery Unlikely for 2011

Real Estate Market Recovery very unlikely for 2011

By Joshua C Anderson, Lexington Realty Correspondent

Thursday January 06 2011

Los Angeles- Government stimulus programs and federal tax credits would have seemed to be great news for the real estate market, however the market has showed slow signs on recovery. While the foreclosure and unemployment rates show no signs of stabilizing, 2011 is almost exactly where it was a year ago with the exception of a few changes.

According to expert analyst the real estate market has yet to bottom out and while prices remain low there simply are not enough qualified buyers to make up the difference. While foreclosures are still very common home values will continue to plummet, further weakening the economy. The only entities benefiting from this situation are real estate investors who are buying properties and holding on them for the long term. One of the major contributors to the crisis is delinquent homeowners who won’t budge. The government has stepped in to offer its help via the HAFA program. It’s essentially a short sale that offers sellers up to $3,500 in relocation assistance if they qualify. The majority of short sellers are in fact insolvent and the relocation assistance would be a great benefit for them. On the other hand there investors who own rental properties and they will not likely benefit from HAFA. The problem however is not easily solved; getting the delinquent homeowners to agree to the short sale requires a lot of negotiating. Like most people in the United States home ownership is the American dream and like anything else there is a deep emotional attachment.

California based firm Housing Assist of America www.housingassist.com is one of the leading short sale companies in the country and have done hundreds of short sales with nearly every lender. A spokesman from the company stated that, “2011 is going to be one our busiest years yet, banks are stepping up their efforts to get these short sales approved with efficiency and satisfactory results”. The end result of these short sales is a positive direction in the real estate market.