A recent article in Inman News, parroted yesterday by REALTOR® Magazine Online, points to a 25% national increase in foreclosure rates from the first quarter to the last quarter of the year. RealtyTrac CEO James Saccacio points out that the number of properties entering foreclosure represents fewer than one percent of American households. He offers the following comments:
"Over the past few years, we've seen historically low mortgage rates, consistently escalating home prices, and steady, strong employment. This has translated into relatively low levels of foreclosure properties, particularly bank-owned properties. With interest rates rising and an apparent slowing of property valuations in most markets, we'll be watching closely to see if there's a material effect on the number of foreclosures in 2006."
Instead of watching interest rates, I suggest that that we watch what happens in bankruptcy courts this year. Congress delivered a bankruptcy bill last year that will make it very hard to consumers to pay their credit card debt and attorneys in the trenches expect that foreclosure rates will escalate as a consequence.
I track the foreclosures in the Lehigh Valley through the multiple listing service. (There is a link in the right column titled Bank Properties that is a link to bank properties available through the Lehigh Valley Multiple Listing Service.) Today there are 88 bank properties available for sale. The number has almost doubled since September:
Sept. 30, 2005 there were 46 bank properties on the market
Oct. 21, 2005 there were 52 properties for sale
Nov. 25, 2005 there were 73 bank properties for sale
Dec. 30, 2005 there were 81 bank properties on the market
It may be too soon to see the affects of increased interest rates on the foreclosure market. Rates have not increased that significantly as compared to their historic low, and most new notes are still under the fixed term. Regardless, foreclosures and bankruptcy rates will be the talk of the day within the next year.
-Randy
www.4mysales.com
Posted by: Randal Wilson | February 17, 2006 at 07:07 PM
You have a great blog and information, we expect power of sale properties to increase in our market too this year.
Thanks for the great information,
Mark
Mississauga Real Estate Homes, Properties & MLS Listings for Sale
Posted by: Mark Argentino | March 19, 2006 at 09:59 PM
Couldn't agree more. Foreclosures will be the result of higher credit card minimum payments, the increase of Prime Rate making minimums higher, tougher BK laws and slowing equity growth.
Just as credit cards get "more expensive", the equity bank account dries up.
Great read!
Posted by: Dan Green | March 25, 2006 at 10:20 AM
Having posted record home sales and increased home ownership, isn't a rise in foreclosures to be expected?
Posted by: Jason B. Graves | April 06, 2006 at 07:03 AM
A loss of a job, death in family, medical expenses and other life-altering situations can happen to anyone, causing us to
fall behind in our mortgage loan payments.
If we neglect paying our credit cards it hurts our credit rating; if we neglect our home loan payments the lender
will foreclose, and repossess our home. We are often embarrassed to talk about our money problems, but that approach doesn't solve anything.
Credit Repair could help you get back on track in the future
Put your pride on hold and get serious about avoiding foreclosure. Contact your lender as soon as you know your payments will be late.
Never ignore the lender's letters and do not assume you are in a hopeless situation. Lenders do not want to foreclose, and will usually work with you to get your account back on track.
Below are Solutions for Temporary Problems
1. Reinstatement When you are behind in your mortgage payments but can promise a lump sum to bring payments current by a specific date.
2. Motgage Forbearance. You are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current.
Lenders sometimes combine Forbearance with Reinstatement if you know you'll have the funds to bring your account current by a specific date.
3.A mortgage Repayment Plan If your account is past due, but you can now make payments, the lender may agree to let you catch up your home loan by adding a portion of the
past due amount to each current monthly payment until your account is current.
Solutions for Longer-Term Problems
1. Mortgage Modification If you can make your regular payment now, but cannot catch-up the past due amount, the lender may agree to modify your mortgage.
One solution is to add the mortgage behind amount into your existing loan, financing it over a long term.
Modification might also be possible if you no longer have the ability to make payments at the former level.
The lender might modify your mortgage to extend the length of your loan, or take other steps to reduce your payments.
2. Selling Your Home If catching up is not a possibility, the lender may agree to put foreclosure on hold, giving you some extra time to attempt to sell your home.
http://www.webuyhouseseasy.com/listings/index.php can help by purchasing your home.
3. Deed in Lieu of Foreclosure The lender may allow you to give-back your property, in turn forgiving the debt.
This does negatively affect your credit record, but not as much as a foreclosure. The lender may require that you attempt to sell the house for a specific time
period before allowing this option; the option may not be possible if there are other liens against the home. http://www.webuyhouseseasy.com/sell_house.htm
If these options aren't available and time is against you. Contact a realtor and have your house listed on MLS (mutly listing service) immediately.
It is better to sell your home and keep a mortgage foreclosure from affecting your credit rating so that you can qualify for a mortgage and buy a house again in the near future rather than
the far future.
Posted by: dean | June 28, 2007 at 08:24 PM
Foreclosure victims should also be concerned about the danger of the bank suing them after foreclosure and trying to take the new house or attach a lien to it. If the house does not sell at sheriff sale for an amount to pay off the defaulted loan plus the extra foreclosure costs and late fees, the bank may be able to sue for a deficiency judgment and come after any other assets owned by the former homeowners. The bank will have to proceed with a new lawsuit after the foreclosure process is over, though, which will cost them additional time and resources.
http://www.thejohnbeck.tv
Posted by: John | December 03, 2007 at 11:57 PM
The bank will sue us if we don't pay the loan completely or if the sheriff cannot make up the amount by going for foreclosure.
Posted by: Jermey | March 25, 2008 at 09:31 PM
How true this article was!
Posted by: Private Commercial Lender | April 04, 2008 at 12:13 PM
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Posted by: Negocio Rentable | February 04, 2010 at 01:48 PM
I have always wondered if there is a reliable source to stop foreclosure. We are living in an era where our natives are facing the worst ever economic downfall in American history. I am glad you made some really valuable points about foreclosures.
Posted by: foreclosure fraud | August 25, 2011 at 08:52 AM