Posted on 12/06/2008 2:38:39 PM PST by BGHater
Foreclosures nationwide continued to soar at a record pace in the third quarter, in large part because of the distressed properties in California, the Mortgage Bankers Association said Friday.
And the worsening economy - officially in recession for a year - is exacerbating the problem, the bankers group said.
Through September, one in 10 U.S. homeowners with a mortgage was at least a month behind on payments or already in foreclosure. Many of the home loans that were 90 days or more past due were in California and Florida, states hit hard in the mortgage meltdown.
"California and Florida represent the largest share of foreclosures," said Jay Brinkmann, the association's chief economist and senior vice president for research and economics
Of the 45.5 million home loans outstanding at the end of the third quarter, 3 percent were in foreclosure, the group said.
In California, 5.9 million loans were overdue - the most in the nation - and 4 percent were in foreclosure.
The delinquency rate for mortgage loans on one- to four-unit residential properties was 7 percent of all loans outstanding at the end of the third quarter, up 1.4 percentage points from a year earlier.
California also had a 7 percent delinquency rate.
The rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure.
California and eight other states had rates of foreclosure starts that were above the national average: Nevada, Florida, Arizona, Michigan, Rhode Island, Illinois, Indiana, and Ohio. The remaining 41 states plus the District of Columbia were below the national average.
"Economic fundamentals are now deteriorating in California and Florida," Brinkmann said.
Over the past year, Florida led the nation in job losses at 156,200, with California losing 101,300, as compared with Michigan job losses at 71,200 and Ohio at 17,300.
Stephen Levy, director and senior economist of the Center for Continuing Study of the California Economy in Palo Alto, said that that during the recession in the early 1990s, Southern California lost more than 500,000 jobs.
The critical thing now is slowing the rate of foreclosures in California, he said.
"There is a silver lining in that we know from Southern California there is plenty of demand at current low prices and people are coming out of the woodwork," he said.
For example, in Los Angeles County home sales in October increased 56 percent from a year ago and the median price fell an annual 29 percent to $335,000, according to MDA DataQuick.
The company also reported that notices of default, the first step in the foreclosure process, fell 40 percent from a year ago. That's due in part to a change in the law regarding when notices are issued.
But foreclosures moderated, falling to 549 from 822 in September.
Levy said aggressive action from lenders and the federal government is needed to get this situation under control.
"You have to do something that gets to the people who are close to default," he said.
greg.wilcox@dailynews.com 818-713-3743
It’s easier to walk away from a mortgage if you’re upside down (that is you owe more than the house is worth. CA and FL home prices were totally crazy, and I suspect many people owe more than their house is now worth.
This is no mystery. We have a radical liberal legislature that cannot stop spending and taxing. Taxifornia’s levels of corporate and individual taxation are some of the top, if not the top, in the nation. The state is business-unfriendly. If it were not for illegal immigration, the population would be declining at an unprecedented rate.
Taxifornia’s credit and bond ratings are some of the lowest. The state has been so badly mismanaged by the spend-crazy liberals in the legislature, we are in the tank for record levels of debt (about 28 BILLION disclosed so far - projection) -— at least the Repubs are fighting to get the tax-spend-mad liberals to cut back and they WILL NOT DO IT — so we have a huge budget impasse.
The “conservatives” know the problem and the radical libs just do not give a flying f&^%. They will continue to tax and spend Taxifornia into oblivion. They just do not care.
Yet the mindless voters just keep putting them back in. What does that say about the liberal voters???? Pretty obvious, I would say.
Ouch! Not an award one would strive for. I live here on the slippery slope of socialism. The times are a’Change’n... and not for the better near-term, it would seem.
Damn anyway, what nincompoops got us in this latest mess? or dare one ask? ;-]
This is a temorary blip due to a moratorium on foreclosures. It doesn't mean that there still won't be the same number of foreclosures in the future, just that the number was pushed into the future.
That doesn’t help a persons credit rating.
You would think not, but I have known several people thru the years who walked out of a mortgage and went on to buy more houses down the line. I don’t get it, but they did.
Loads of illegal aliens in both states plus two RINO governors.
This is a temorary blip due to a moratorium on foreclosures. It doesn't mean that there still won't be the same number of foreclosures in the future, just that the number was pushed into the future.
http://www.mortgagebankers.org/files/News/InternalResource/44130_Testimony.pdf
The title of the article actually gives where the bulk of the foreclosures are..right up front. Usually, the header reads..”Nationwide Foreclosure Rate At All Time High”, and sometimes buried in the article mention is made of the high concentration of foreclosures in certain areas (California, Nevada and Fla). The header "Nationwide" is far more alarming and panic causing.
Other headlines I have noticed that seem to be somewhat deceptive:
“Nationwide Unemployment Rate Rises to (insert per centage rate here).” In looking at a list of individual state's unemployment rates, most are under the national level. Michigan being the biggest exception.
“XYZ Company Lay Off 3,000 Workers”. Omission of the word “global” creates the impression that there huge numbers of lay offs locally.
That being said, yes, there are foreclosures and unemployment. But I wonder if a “panic” is being caused by the method of reporting these events. Is this more media manipulation, as seen in the election?
(And my heartfelt sympathies to anyone suffering unemployment or foreclosure in any area of the country.)
Just posted the link and forgot to explain, the largest number of foreclosure have already happened. The current rate is actually about normal. The foreclosure stuff is just cover for the banks anyway. You could have bought down every ARM in this country for 700B dollars and had tons of money left over. Not to mention the 3 trillion the fed has shoveled out the window. And the 400 billion to Fannie and Freddie.
Look at the grafts at the end and the dates of the link. Most of the bogus home loan were made by countrywide. However, there are ton's of people now upside down in their homes. I would be taking the deeds to the lender if I were they.
Now the statement is becomming more correct.
In fact, if it wasn't for Schwarzenegger, the Democrats couldn't have increased the spending. There is also the pesky little fact that the governor, not the legislature, has been raising taxes since 2004. So ...
We have a radical liberal governor that cannot stop spending and taxing.
Now the emphasis is correct.
Not to worry. There are many illegals in CA who will be willing to squat in the foreclosed homes. Of course, don’t expect them to pay property taxes to cover the generous CA State services and benefits they suck up.
CA really deserves everything it gets—and then some. And that includes the clueless, carbon-hating Governator.
We have a radical liberal governor that cannot stop spending and taxing.
::::::::
And to be even MORE correct, we have both of them to deal with!!!!
California ping
Another record for California. Oh, joy!
Option ARM & Alt-A interest only loan resets are just starting to happen and most states have delayed foreclosures and unemployment is rising rapidly. Foreclosures are definately NOT close to normal. They represent 3% of all outstanding loans and didn’t drop even with a very large number of states and banks (like Citi/FNM/FRE) postponing foreclosures. I’d bet 75% of those with option arms end up going straight into foreclosure—if not higher and that doesn’t peak until middle of 2010.
Foreclosure will go up because of job lose. However, a smart individual will write a deed to the lender and walk away, many people would be even more stupid to stay in homes they are completely upside down in.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.