Foreclosures increasing- here comes The Greater Depression!
15/09/2006

The number of homes in some stage of foreclosure in August rose 53 percent in a year. Compared to the prior month, foreclosures are 24 percent higher than in July, according to a survey by RealtyTrac, an online marketplace for foreclosure properties. According to RealtyTrac, 115,292 properties went into foreclosure in August. August foreclosures are second only to the 117,151 properties foreclosed on in February. RealtyTrac defines a foreclosure as any property in any of the following three stages: "Pre-foreclosures - Notice of Default (NOD) and Lis Pendens (LIS); Foreclosures - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and re-purchased by a bank)." Rick Sharga, RealtyTrac’s vice president of marketing, tells CNNMoney that the slumping housing market is contributing to the spike in foreclosures. Homeowners in danger of losing their homes could have unloaded their properties quickly in the housing boom. Or, they could have refinanced their ever-increasing property values. Now, those outs rarely exist. Just take a look at the hard hit the previously red-hot markets are taking. Florida’s August foreclosures increased 50 percent in a month and 62 percent over the past year. In California, foreclosures surged a shocking 160 percent in a year. Nevada’s foreclosures ballooned a whopping 255 percent from last August. Sharga also points to the proliferation of ARMs, which help lower a monthly mortgage payment but the rates and payments adjust after a specified amount of time. Homeowners with ARMs that are resetting will likely face higher payments, since interest rates have risen over the past few years. Just three months ago, MoneyNews quoted Brad Geisen, president and chief executive of property tracker Foreclosure.com as saying, "ARMs are a ticking time bomb. Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures." In March, MoneyNews told you that Douglas Duncan, chief economist for the Mortgage Bankers Association warned the MBA was "expecting an up-tick in delinquencies due to a number of factors: the seasoning of the loan portfolio, the increased shares of the portfolio that are ARMs and subprime mortgages, as well as the elevated level of energy prices and rising interest rates." Says RealtyTrac’s Sharga, "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."

 
 
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Matthew 24:44

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