Foreclosure rates up 25 percent in October
Bailout News, Politics, California Housing Crash, Florida Housing Crash, The Economy, Real Estate November 13th, 2008
This from AP via Yahoo Finance:
MIAMI (AP) — The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.
More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.
More than 84,000 properties were repossessed in October, RealtyTrac said.
A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market. By the end of the year, the company expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.
USA Today talks about the effects that the foreclosure prevention law passed in California had in the national numbers:
NEW YORK (Reuters) — Foreclosure activity in October rose 25% from a year earlier, although filings in California fell by double-digit percentage points for the second consecutive month due to a state law slowing the foreclosure process, according to a monthly report by RealtyTrac.
The California law, which requires lenders to contact homeowners and explore options to avoid foreclosure before initiating the process, took effect in early September and drove the state’s foreclosure activity rates down, at a pace of 31.6% from August to September and 18% from September to October.
But in September, the California law helped drive the national foreclosure rate down, something that did not happen in October.
The numbers might also be showing the effects of the economic downturn, Sharga said. If they do not yet, they will soon.
“An economic downturn is traditionally a precursor to foreclosures, even in a normal foreclosure cycle,” Sharga said. “This is not a normal foreclosure cycle by any means.”
Moreover, California’s law will likely not prevent most of the state’s homes which are teetering on the brink of foreclosure from falling off the cliff, Sharga said.
Previous experience with similar laws in Maryland and Massachusetts attests to such laws’ inability to make a material difference.
“For most homeowners, these laws just delay the inevitable,” he said.
