More Foreclosures Coming After the Election
The good news, if you're the incumbent president, is that mortgage foreclosures are slowing down. From Housing Wire:
The number of seriously delinquent mortgages in the nation's largest metropolitan areas slowed this year, according to a new study from the Urban Institute. But foreclosures remain a burden on the housing market, prompting the policy research group to call for a resolution to the housing crisis to ensure the foreclosure backlog is cleared out in a reasonable time period.
The institute said the serious delinquency rate in the 100 largest metro areas slowed to 9.3% in June from 10.4% in December 2009, according to data from Foreclosure-Response.org. The Urban Institute said the serious delinquency rate is classified as the share of loans in foreclosure, plus all of those that are more than 90 days in arrears.
But that's not really good news, if you're interested in seeing a healthy housing market. It's going to take a long time at this rate to clear away those delinquent loans. Maybe even another decade:
"The foreclosure inventory that is building up is going to take an incredibly long time for lenders to clear," said Leah Hendey, research associate at the Washington firm. "At the current pace of foreclosure sales, we are looking at a process that could take decades to complete. It is critical that the status of these properties be resolved quickly if we want to stabilize communities and housing markets."
Right now, there are six million delinquent mortgages that are on the way to being called in an repossessed. That's a lot of property. Six million foreclosures would be a noticeable thing on every street and every neighborhood. And six million foreclosures -- which are coming, by the way, at some point -- would have a dampening effect on Obama's rising popularity.
Conspiracy theories are, of course, a violation of our magnificent Code of Conduct, but who doesn't think that the housing market is going to get bad, suddenly, with foreclosures going up, suddenly, around November 6th, 2012?
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Comments:
May '11
Re: More Foreclosures Coming After the Election
Rob, I'm not sure why you feel that foreclosures will go up just before the election. Given that the banks have fared relatively well under Obama it would seem that they would want to hold off on foreclosures until after the election.
Obama is going to make the claim that we really are better off now than before he took office. A lower foreclosure rate would seem to bolster that claim.
Re: More Foreclosures Coming After the Election
Did I get the date wrong? That's what I meant to say -- right after Election Day 2012, suddenly: foreclosures!
Jun '10
Re: More Foreclosures Coming After the Election
The REO (real estate owned) departments of these lenders have a specific capacity and an ongoing pipeline of activity. This time last year foreclosure activity at Bank of America and a couple of other lenders was halted for a couple of months when it was found some employees were short-cutting some steps in the paperwork. Other than that there has been a relatively steady, albeit high volume, stream of REO activity. I appraise several of these properties every week. Ever since the initial increase in 2008 there have been undulations but no avalanches. Additionally, some areas are greatly affected and some barely at all (within my own market and across the nation). I suspect that the foreclosures to come will just feel like more of the same.
Jun '10
Re: More Foreclosures Coming After the Election
This does put the lie to claims of economic recovery between now and then (along with the bogus employment statistics).
Mar '11
Re: More Foreclosures Coming After the Election
This is only anecdotal but it seems to me the market is improving. I buy homes in foreclosure in the Phoenix, AZ area and have noticed an increase in competition in bidding for them and more demand after I refurbish them for resale. Perhaps it's temporary but my friends in the business have noticed the same trend. Here in Utah where I live, the banks are predicting a housing shortage in late 2012. There's still some building going on but subdivision lots are difficult to find since developers haven't invested in new ones and subdivision approvals and development can take quite a while.
Jun '10
Re: More Foreclosures Coming After the Election
It is a great time to do what you're doing Richard. I wish almost daily that I had some extra $ to invest around here. I see deals constantly.
Re: More Foreclosures Coming After the Election
This is what I love about Ricochet! Put up a post, and get some expert opinion! Thanks, Carver. This is interesting stuff.
So, tell me, from your vantage point, what are the four or five things you'd like the next (sane) president to do to reform the housing market?
And yes, this is homework.
Dec '10
Re: More Foreclosures Coming After the Election
More Hope & Change --- Sweet.
Jun '10
Re: More Foreclosures Coming After the Election
Thank you, Rob,
I've been covered up with in-laws for two weeks, I work all day, come home on Friday night and now this... : )
I have a good bit to say so look for more later this weekend. I hope this thread is not completely buried by the time I can finish the assignment.