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Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, the latest period for which the Mortgage Bankers Assn. has figures, easily topping the previous record of 1.97% set in 1985. The epidemic of bad loans and lost homes among prime borrowers has only worsened since the second quarter ended, according to other, more recent data. By putting more foreclosed homes on the market, the trend is likely to further depress housing prices, intensify the mortgage-related crisis afflicting the financial system and exacerbate the recession most economists believe is already underway. More

Reuters — Families are flooding homeless shelters across the United States in numbers not seen for years, camping out in motels or staying with friends and relatives, homeless advocates say. “There are lots of families hemorrhaging into homelessness and we need to figure out how to put a tourniquet on the hemorrhaging,” Philip Mangano, the homelessness czar appointed by President George W. Bush in 2002, told Reuters. San Francisco’s four shelters are “beyond full,” according to Paul Boden of the Western Regional Advocacy Project, whose organization has identified 450 families with 800 children living in single-room hotels in the city. In Virginia’s Fairfax County, one of the richest counties in the United States, there are about 100 families on a waiting list to enter shelters, local officials say.

Maria Stephens, 38, a mother of three young boys, lived in one of the Fairfax shelters for seven months after two landlords were foreclosed on and she lost her job as a mortgage underwriter earning $80,000 a year. “It was a hell of an experience for me. I went from having my own bathroom to having to share a bathroom with five families,” said Stephens, who now works in a restaurant making $9 an hour and was helped by a local group, Reston Interfaith, to move into temporary accommodation in July.

The public perception is that newly homeless families borrowed money they were unable to repay or were the victims of greedy banks that sold them mortgages they could not afford. But homeless advocates say most are actually renters whose landlords were foreclosed on, or who lost their jobs, and were then unable to find the first and last month’s rent and security deposit to secure new accommodation. Local and state homeless groups have seen a 61 percent rise in homelessness since the foreclosure crisis began in 2007. More

Lisa Ling
KCET
Posted: September 23, 2008
For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes. The process is called a “trashout” - a term the company came up with because it perfectly describes what happens. Everything that’s left is dumped in a trailer and taken to the landfill. Then there’s the guy who started a business to spray-paint dead lawns. That’s right. He paints brown lawns green. We also tag along with a couple of code enforcement officers who are spending more and more of their time having to drain slimy, abandoned pools.

Finally, we meet a typical couple who bought their first home, thinking it was a great investment and tax write-off. Now the place is worth only half of what they paid for it and their neighborhood has almost as many vacant homes as occupied ones. One of the code enforcement guys sums up the problem in a single sentence - “You know you’re in trouble when the lawns are brown and the pools are green!” More

Forbes
Desperate to stop the tide of foreclosures plaguing Florida, the U.S. Department of Housing and Urban Development launched its Neighborhood Stabilization Program on Oct. 16, which will give the Florida government $540 million to buy troubled properties and turn them into rentals. But taking foreclosed homes off the market isn’t enough to prevent more havoc on the Florida economy. Expect already high foreclosure rates in Jacksonville, Naples and Miami to increase by 14% to 15% next year thanks to bottomless home prices and job loss.

“It’s so far from recovery,” says Doug Duncan, chief economist of Fannie Mae. He says the ability to sell a home in the Sunshine State is not related to price, especially in the condo sector. “You can drop the price to zero and not sell a brand new property because there’s no one there to buy it.” More

(Bloomberg)
Leigh Sogoloff, who spends her evenings lap-dancing at Rick’s Cabaret Vegas on Procyon Street, says she’s making half her income of a year ago. “You don’t shop, you don’t buy stuff you can’t afford,” the 36-year-old Sogoloff said between dances at the Las Vegas club. She has postponed buying a house and is reading Deepak Chopra. “I know how to save money. I’m not a dumb stripper.” The city that sold Americans on the dream they could lay down a small wager and walk away millionaires is reeling from speculation in the housing market that helped bring down Wall Street. The quick profits that so easily spread from Nevada to Florida, just as casino gambling migrated to 37 states, are now proving what happens in Vegas rarely stays in Vegas. Las Vegas leads the nation in falling home prices, foreclosures and stalled construction projects. Rick’s Cabaret International Inc., with 20 clubs in seven states and two in Buenos Aires, has lost 74 percent of its market value this year. More

The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults — the very misfortune that touched off the credit crisis last year. The result of homeowners being “underwater” is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall. And having more homeowners underwater is likely to mean more eventual foreclosures, because it is hard for borrowers in financial trouble to refinance or sell their homes and pay off their mortgage if their debt exceeds the home’s value. A foreclosed home, in turn, tends to lower the value of other homes in its neighborhood. More

Steve Maich
We’ve had market crashes before. We’ve had bad recessions before. They’re not nice, but we survive them. Part of what has helped us survive is the distinction between private enterprise and public finance. Public finance should be used to address the damage from market crashes. If you had a trillion dollars to spend, you could do an enormous amount to help people hurt by a market crash. With a trillion dollars, you could create a public program to halt home foreclosures, for example. You could go on a massive public infrastructure spending program to employ all the tradespeople hurt by the housing collapse (and address a huge and simmering long–term threat to the economy at the same time). That’s just two examples. More

Mr. Mortgage
The next few months will be interesting in the default and foreclosure reporting and tracking business. In my day job as Clark Kent, I provide independent research to funds on the default and foreclosure universes as a whole and by individual bank; research that is nearly impossible to find anywhere. From this, I bring my blog readers as much free information as I can, including very detailed monthly foreclosure and housing reports that get very granular, dissecting the sectors in ways others can’t.

That being said, we have some changes coming to the default and foreclosure universes in CA in particular, which is 35% of the total foreclosure count and 45% of the dollar volume of the nation. These changes will impact the numbers and likely show the market is improving quickly. This also may give the impression that the housing market is improving. I will be on this story like pump on Cramer in order to bring you the real story.

Be careful drawing any conclusions from the media headlines reporting declines in default and foreclosure activity until you have checked with me first. Even national reports may be impacted as CA represents such a large percentage of the national volume.

The reality is that laws such as this only delay the process, which I will be able to track in real time and bring you the results of my findings. Unless lenders radically change their position on loan modifications with massive principal balance reductions and new fixed rate loans to replace the toxic trash, it will likely have little impact other than a delay of the inevitable. More

Homeowners lured by low introductory rates to Alt-A mortgages, which typically require little or no proof of a borrower’s income, may fuel the next wave of foreclosures and further delay a recovery from the worst housing decline since the 1930s. Almost 16 percent of securitized Alt-A loans issued since January 2006 are at least 60 days late, data compiled by Bloomberg show. Defaults will accelerate next year and continue through 2011 as these loans hit their three- and five-year reset periods, according to RealtyTrac Inc., an Irvine, California-based foreclosure data provider. More

(Bloomberg) — U.S. foreclosure filings rose to a record in August as falling home prices made it harder to sell or refinance homes to pay off the mortgage, RealtyTrac Inc. said. The worst housing slump since the 1930s shows little sign of abating. Home prices in 20 U.S. metropolitan areas declined 15.9 percent in June from a year earlier, according to the S&P/Case- Shiller index. Prices may fall another 10 percent through the end of 2009, according to analysts at Lehman Brothers Holdings Inc. More

Mr. Mortgage
Last month home sales surged in many states around the nation especially in CA where they jumped to 39,500, up 12.2% June. However, values also fell 3%, foreclosures ran over 30k units and foreclosure-related sales as a percentage of total sales surged to 45%. This means ‘organic’ sales were running in the 20k range, the slowest July in recent history. To me, this means that the overall housing market continues to worsen. (Please see my July CA Home Sales Report). Show me a month where sales do well but prices are stable and foreclosures decline and that is a light at the end of a long tunnel. That has not happened yet.

But who is buying all of these homes? In CA, values are down 35% in the past 14-months! We know that a large percentage of home owners are literally ’stuck’ in their home unable to sell or refinance so they are not buyers. The all-important ‘move-up’ buyers do not exist to any great degree any longer because affordable mortgages are gone and many can’t even afford to re-buy the home they live in today. ’Move-down’ and ‘lateral’ buyers are not out in any great numbers also because of the two reasons above. More

Foreclosures in the US continued to climb in the second quarter of 2008, experts acknowledge that the current housing slump is “without precedent” in the modern era, and the resulting stress is taking both an economic and emotional toll: a 53-year-old Massachusetts woman committed suicide July 22 only hours before her family’s home was to be put up for auction. In the three-month period April through June, some 740,000 foreclosure filings were recorded in the US, an increase of 14 percent over the first quarter and 121 percent over the same period in 2007. According to RealtyTrac, one in every 171 US households received a filing, which includes notices of default, auction sale notices and bank repossessions.

The banks took back some 220,000 homes in the second quarter (and 370,000 in the first six months of the year) and there are presently 18.6 million homes in the country standing empty, the highest number in history. The number of vacant houses has jumped nearly 7 percent in the last year. California’s Central Valley “remains ground zero” for foreclosure filings, as CNNMoney notes, with one in every 25 houses in Stockton affected, for example. Riverside-San Bernardino, east of Los Angeles, had the second highest rate with one filing for every 32 households. Las Vegas, Nevada and Bakersfield and Sacramento, California were the others among the top five regions. More

SAN DIEGO (Reuters)
San Diego’s city attorney said on Wednesday he filed a lawsuit against Bank of America Corp and its Countrywide unit to prevent the mortgage lenders from foreclosing on homes in the city, which he aims to make a “foreclosure sanctuary.” City Attorney Michael Aguirre plans to file similar lawsuits against Washington Mutual Inc, Wells Fargo & Co and Wachovia Corp in an effort to make the lenders negotiate with mortgage borrowers facing foreclosure. “We would like to see San Diego become a foreclosure sanctuary,” Aguirre said. Housing markets across Southern California, including the city of San Diego and the county of the same name, are seeing steep increases in foreclosure rates because so many homes bought there earlier this decade involved subprime mortgages and other types of risky loans. More

The Charlotte Observer
Tamika Shears says she never missed a rent payment, but she was still forced out of her home. Her situation reflects a growing number of renters facing eviction because of the widening foreclosure crisis gripping Charlotte along with the rest of the nation. Shears and her two children had lived in a four-bedroom house in northwest Charlotte for more than a year when their landlord lost the house to foreclosure. “My first thought was, ‘Where are we going to go?’” she recalled. Homeowners displaced by foreclosures have received much attention. But legal and housing experts estimate at least one of every four homes in foreclosure in the Charlotte area is non-owner occupied. Renters were similarly punished during the mortgage industry meltdown in the early 1990s, but this time problems are far more widespread, said Judith Liben, a lawyer with the Massachusetts Law Reform Institute. She testified before Congress last year about the issue. More

New foreclosures almost quadrupled in Los Angeles and doubled in Miami in the second quarter, with as much as $5 billion worth of loans going bad in L.A. alone, the online real estate data company PropertyShark.com reported. The number of homes scheduled for auction in Los Angeles rose 14,505 compared with 3,797 in the same period a year earlier, PropertyShark said in a report distributed by e-mail. In Miami-Dade County, the number climbed to 2,677 from 1,282.

“The foreclosure chart for Los Angeles is unfortunately starting to look like a ski jump,” Adina Dumitru, a member of PropertyShark’s foreclosure products team, said in the statement. The percentage of U.S. homes in foreclosure more than doubled since December 2006 to about 2.5 percent this March, according to the Washington-based Mortgage Bankers Association. Defaults among subprime borrowers with poor or limited credit histories are driving the increase, along with the rising number of people unable to make payments on adjustable-rate mortgages that started out with low “teaser” interest rates that increase after two or three years. More
Also See: Company Bankruptcies in U.S. Outpace Individual Filings

Photo karlfrankowski

Dan Levy
bloomberg.com
U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as mortgage industry efforts to modify loans fell short.

More than 243,300 properties were in some stage of foreclosure, the highest monthly total since RealtyTrac Inc., a seller of default data, began in January 2005. One in every 519 households received a filing and Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.

The worst housing slump since the Great Depression may push the U.S. economy into a recession. Read more

“In this chilling BBC clip, a news team ventures to one of LA’s new shantytowns made up of people who’ve lost their homes in the subprime meltdown and now live in tents, improvised shacks or RVs.”