The Foreclosure Report

Homes Entering Foreclosure 'Surging'

From CNN Money. "With real estate markets slowing and mortgage rates well above levels of recent years, times are getting tougher for homeowners, the number of homes entering into some stage of foreclosure is surging."

"In August, 115,292 properties entered into foreclosure, according to RealtyTrac. That was 24 percent above the level in July and 53 percent higher than a year earlier. Florida, had more than 16,533 properties in foreclosure in August. That led all states and was 50 percent higher than in July and 62 percent higher than in August 2005."

"California foreclosures are increasing at an even faster annual rate, up 160 percent since last year to 12,506. And the formerly red-hot Nevada market recorded a spike of 24 percent compared with July and a whopping 255 percent increase from August 2005."

"RealtyTrac's Rick Sharga says the rising foreclosure numbers are in part the result of rising monthly payments on adjustable-rate mortgages, which have a low introductory interest rate that heads higher after an initial period. 'Usually, foreclosures are a lagging [market] indicator,' he says. 'But we've never had a situation like this with adjustable-rate mortgages amounting to $400 billion to $500 billion coming up for adjustment over the rest of the year.'"

"'The real wild card is the nature of the loans themselves. Historically, ARMs were underwritten pretty conservatively. There has been a loosening of standards with lower credit worthiness and smaller down payments,' Sharga says"

"Georgia had the highest number of new foreclosures in August, according to a new report. Data shows Georgia had 7,176 foreclosed properties and 2,478 new foreclosures in August, putting it in first place for the fourth time in the past five months."

"Metro Detroit homeowners are skidding into foreclosure at nearly three times the rate as they were last year as a slumping economy, falling home values and risky mortgages leave more household budgets in the red."

"Foreclosures shot up 137 percent, from 14,789 to 35,041, in Wayne, Oakland, Macomb and Livingston counties from January through August, compared to the same period last year. Increasingly 'creative' lending practices are also contributing to the spike, say Realtors, financial experts and bankruptcy attorneys."

"With falling home values and the housing supply far outweighing demand, people are finding it hard to sell for what they owe on the property. 'It is tougher for the average person to sell their house and recoup their money if they owe 100 percent of the value of their home or even if they got 90 percent mortgage or 80 percent mortgage. Houses aren't selling,' said Dorothy Guzek, a financial counselor with in Troy."

"On Tuesday morning at an Oakland County foreclosure auction, Matthew Chodak of the Oakland County Sheriff's Department read off 103 properties on the auction block, including a $2.5 million home in Oakland Township, an $84,000 home in Hazel Park and many more in between."

"Those foreclosures hit the local market hard, said Joel Root, a real estate consultant in Clinton Township. 'You're going to put more lower-priced homes on the market, so that's going to hurt the whole market,' Root said. 'It's a depressed area already and now we're adding homes to the market that people otherwise would not have wanted to sell.'"

"That doesn't help lenders who also are trying to unload homes as they lose $30,000 or more in the foreclosure process. 'People don't realize it but the average investor loses $40 a day' from the day a homeowner defaults, said David Trott, whose law firm represents banks and mortgage brokers."

"'It's an economic nightmare for them and investors are looking at Michigan with a great deal of concern because not only are they getting a lot of foreclosures, but they're having a hard time reselling,' he said. 'To say that our clients are concerned is probably an understatement.'"

"More than 100 residents of Sarasota County sent a clear message to their elected officials during Monday night's public hearing to consider the county's proposed $1.14 billion budget: The 'Save Our Homes' legislation is killing Florida."

"'Foreclosures are happening everywhere,' Wiley said. 'There were 25,701 foreclosures in the state of Florida for January, February and March of 2006. Enough is enough.'"

posted by Ben Jones @ 2:48 PM