Friday, July 25, 2008

Rising Foreclosure Rates

Lets just go to the absolute worst part of a depressing article -

"We've been saying foreclosures will total 1.9 million to 2 million this year," [RealtyTrac spokesman Rick Sharga.] said. "But midway through the year, we're already at 1.4 million so we're going to be raising our projections."

Not exactly a TGIF you want to wake up to. Just CNN Money's article title More Foreclosure Gloom lets you know things are bad and getting worse. Foreclosure filings are skyrocketing. The situation is deteriorating. Hopefully we hit the bottom soon. Lets take a look -

Foreclosures continue to soar, with 220,000 homes lost to bank repossessions in the second quarter of this year, according to the latest statistics from RealtyTrac, an online marketer of foreclosed homes. That's nearly triple the number from the same period in 2007.

There were a total of 739,714 foreclosure filings recorded during that three month period, up 14% from the first quarter, and up a whopping 121% from the same period in 2007. That means that out of every 171 U.S. households received a filing, which include notices of default, auction sale notices and bank repossessions.

"Most areas of the country are seeing at least some increase in foreclosure activity," said RealtyTrac CEO James Saccadic. "Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity."

"I don't think that's a surprise if you look at the general conditions out there," said Brian Bethune, chief financial economist for Global Insight. "There have been six straight moves of weaker employment this year. The ongoing problems in the housing market are compounded by a generally weaker economy. Foreclosures won't go down until we start to see employment move up again."

The report came as more negative news for the housing market this week. On Thursday, a report form the National Association of Realtors revealed that existing home sales had declined again as the number of homes for sale continued to rise. On Tuesday, a government agency reported home prices registered another drop in May.

We are rising in areas that will hurt - foreclosures rising, unemployment rising, homes for sale rising (wonder what percentage is short sales?). And dropping in areas that hurt as well - property values, selling prices, which from the previous post also means drops in HELOC and equity availability.

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