The Foreclosure Report

Defaults Jump Across The US

Some reports on foreclosures from around the US. "'In Massachusetts,' said Alexis McGee, 'we saw 1551 new foreclosure filings in April 2006. As of May 13, foreclosure filings were up 35% from the same period in 2005.'"

"'According to our research, foreclosure activity in New Jersey reached a level of 4,425 filings in the first quarter of 2006 as opposed to just 459 in the same quarter in 2005. That's an almost ten fold increase,' warned Ms. McGee. She added that she expected the situation to get worse through the rest of 2006 and into 2007."

"Ms. McGee expressed concern that homeowners were still using their houses as ATM machines. She continued, 'Freddie Mac just reported that 88% percent of the loans they purchased in the first quarter of 2006 were cash-out refinances. With the real estate markets going flat, the refinance resource will dry up. And with interest rates continuing to rise, payments on so-called exotic adjustable loans would become unaffordable for many households.'"

"She added that she found it 'amazing' that some lenders were still pushing home equity loans and lines of credit up to 125% of the home's value. 'With markets cooling down and prices leveling off, that's another recipe for disaster,' said Ms. McGee."

"'The situation is particularly acute in Florida,' said McGee. She went on to say that, according to her data, foreclosure filings had increased 42.55% in the first quarter of 2006 over the fourth quarter of 2005. 'Prices have gone completely flat in Miami and have even started to slide a little,' said Ms. McGee. She added that the inventory of unsold homes in Miami had jumped more than 88% in the last six months, while in Tampa the inventory had climbed more than 64% in the same time period."

"'Prices have gone flat in Tampa as well,' Ms. McGee said, 'and this growing number of unsold homes is a harbinger of price corrections to come. Speculators are dumping their properties and moving on.'"

"Ms. McGee said that other southern markets such as Atlanta were stabilizing at relatively normal price and inventory levels. 'Nevertheless,' she pointed out, 'foreclosure activity in Atlanta jumped to 6256 filings in the first quarter of 2006 from 3668 in the fourth quarter of 2005.'"

"'In Illinois, we saw a total of 13,273 foreclosure filings in the first quarter of 2006. That's way up from 1,873 in Q1 of 2005. And we saw 4,012 new filings in April alone. It looks like the default rate in Illinois is growing rapidly,' said Ms. McGee."

"She went on to say that things were even worse in Michigan where GM and Ford have made massive job cuts. 'Michigan experienced 22,742 mortgage default filings in the first quarter of the year,' said Ms. McGee. She added, 'The Midwest never got caught up in the feeding frenzy that skyrocketed prices in the overheated coastal markets. We suspect that job loss is the major factor for foreclosure increase in the region.'"

"Ms. McGee said that Ohio, another state heavily dependent on the manufacturing sector of the economy, also saw a tremendous year over year increase in foreclosure activity. 'The first quarter of 2006 saw more than 22,800 foreclosure filings. That's more than a 165% increase from the same period in 2005.'"

posted by Ben Jones @ 9:02 AM