11
Mar
10

Good News On Foreclosures? HA!

The headline sounds positive, “Foreclosure rates up by smallest amount in 4 years” Can it be that the whole housing mess is over? HA! The article tries to be upbeat but the truth is that this is still an increase from last year, 6% higher than last feb to be exact.

From the article we have the following stats:
More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice
That is in just one month. And that is including those homes that are paid for so its a rather ominous stat. To expand that over the year we would be seeing some 3,696,000 foreclosure notices going out over the next year. And that is with the new lower rate of increase.

Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.
That puts the annual rate at 948,000 repo’d homes. Just shy of a million. Those are some pretty big numbers.

foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.
I would expect that number to grow. There was an article in the paper a day or two ago about people, for the first time ever, are choosing to skip mortgage payments to pay instead on credit card debt. The credit reporting agencies are flummoxed by this behavior as they have never seen it before. But I think its quite simple. People are giving up on their houses and know that they have a few months of free living and can use that to pay off high rate credit card debt. They may just be prepared to say goodbye to the house but know that bankruptcy is more difficult now, thanks to the credit card companies, so they will get rid of that debt first. Also, when given the chance to pay all bills but one, or just one, perhaps they are choosing to forego the high mortgage payment in order to pay the bills that they can. As an anecdotal aside to this, my parents met a woman this last weekend who has a masters degree who is working as a security guard in the tunnels in Seattle because she cannot find a job. If someone with a masters cannot find real employment, how can she be expected to pay her bills? She can’t and she won’t. We have a LONG way to fall yet before this is all over.

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3 Responses to “Good News On Foreclosures? HA!”


  1. March 11, 2010 at 4:09 PM

    How can a home that’s PAID FOR receive a foreclosure notice?! That doesn’t make sense!

  2. March 11, 2010 at 9:52 PM

    MarkyMark,

    That 1 in 418 number includes those houses that are paid for. If they did the stat as to how many homes had loans it would look much worse. Hence the sugar coating and including all homes.

    The total number of homes is 128.7 million
    I am seeing two numbers in regards to how many mortgages there are, one at 75 million and one reporting it as 49 million. If we took just the mortgaged numbers which would make much more sense we get 1 in 243 or 1 in 159 respectively. As you can see these are much less rosy numbers and is the reason that the news article did not give them.

    Also, if they were to point out that we are on track to foreclose on 1.5-2% of all mortgaged homes this year alone that also wouldn’t paint a very rosy picture so its glossed over in hopes that the reader doesn’t notice it and try to figure out how it points to the deep pile of $h!t we are in

  3. March 12, 2010 at 7:15 AM

    I am angered nearly to the point of violent rebellion by the legacy media resporting every bad economic statistic as if it were a good statistic. I can remember how during the Bush administration, much less sever numbers were reliably reported as catastrophic, near DOOM indicators.

    The legacy media is so much in the bag for this administration it is not even questionable.


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