Foreclosures grew by 53% since June 07
July, 10 at 11:19 am
More horrible news for the housing market. RealtyTrac just released the numbers for June and as expected, foreclosures keep going up. AP via Yahoo Finance reported the following:
WASHINGTON (AP) — The number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday.
Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month.
Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates.
Economists project 2.5 million homes nationwide will enter the foreclosure process this year, up from about 1.5 million in 2007.
Analysts say the mortgage industry’s effort to assist troubled borrowers is being overwhelmed by the magnitude of the foreclosure crisis, and Treasury Secretary Henry Paulson said earlier this week that many foreclosures are “not preventable,” citing borrowers who “took out mortgages they can’t possibly afford and they will lose their homes.”
This is how Bloomberg reported the news:
July 10 (Bloomberg) — U.S. foreclosure filings rose 53 percent in June from a year earlier and bank repossessions increased the most since RealtyTrac Inc. began collecting data in January 2005 as deteriorating property values forced more people to give up their homes.
One in every 501 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac, an Irvine, California-based seller of default data, said today in a statement. Bank seizures rose 171 percent.
“The foreclosure problem is getting worse and will stay with us well into the next decade,” Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania, said in an interview. “The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you’ve got negative equity, and you’re more likely to give up your house if you’re deeply underwater.”
Posted in Mortgages, The Economy, Real Estate | No Comments »
Housing crash links of the day
July, 9 at 5:05 pm
The Fannie and Freddie doomsday scenario
Extending the mortgage-crash pain
Bowyer: The Coming Obama Recession
BofA CEO: Recession ‘Feel’ May Last A Year
U.S. Stocks Tumble, Sending S&P 500 to Bear Market; Banks Slide
Fannie Mae Pays Record Spreads on Two-Year Note Sale (Update2)
U.S. Stock Optimism Falls to 14-Year Low Amid Dow Bear Market
We’re All Homeowners Now, Nationalization of Fannie, Freddie Unavoidable
Posted in Mortgages, The Economy, Real Estate | No Comments »
Pickens plan to reduce our dependency on foreign oil
July, 9 at 7:00 am
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Another blow to the housing bubble
July, 8 at 11:08 am
Better late than never. It looks like the Fed is finally going to regulate mortgages to prevent another housing bubble from forming in the future. They should’ve done this four years ago but as always, the government is late to the party. Bernanke is saying that the Fed will issue new rules “aimed at protecting future homebuyers from dubious lending practices”.
According to AP via Yahoo:
The rules will crack down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles. The plan would apply to new loans made by thousands of lenders of all types, including banks and brokers.
It would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower’s income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value.
This is what the New York Times is saying:
Mr. Bernanke said that the Fed would issue next week long-awaited rules to restrict new exotic mortgages and high-cost loans for people with weak credit. Such mortgages have been a central cause of the current market problems.
The Federal Housing Administration will also begin an expanded effort next week to help a larger group of troubled homeowners refinance their adjustable mortgages. Under the plan, homeowners would be eligible to refinance even if they have missed up to three monthly mortgage payments over the previous 12 months.
Homeowners who have fallen behind on their payments because of job loss, declining wages and family illness would also be eligible, even if their rates have not increased. Homeowners are now eligible only if they were current on their mortgages before their interest rate was adjusted upward.
Posted in The Economy, Real Estate | 1 Comment »
Pending homes sales plummeted 4.7% percent in May
July, 8 at 10:35 am
It looks like the Spring bump in sales is over and we are now entering another leg down for the housing market. Those who expected that the market would recover this Spring/Summer are now seeing that things will get worse before they get any better.
Reuters reports that “Pending sales of previously owned U.S. homes plummeted by 4.7 percent in May, far more than expected and a sign of more trouble ahead for the beleaguered housing market”
CNNMoney says: “Renewed pain for home sales. The number of existing homes under contract to be sold dips 4.7% in May after an unexpected rise the month before.”
The Wall Street Journal says: “Pending-Home Sales Index Slips. A forecasting gauge of home sales resumed falling in May, suggesting the housing market is still searching for the bottom.”
If you want to read the whole NAR report, here it is.
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5.
The PHSI in the West slipped 1.3 percent to 97.5 in May but is 2.0 percent higher than May 2007. In the Northeast, the index declined 2.9 percent to 77.0 in May and is 16.4 percent below a year ago. The index in the Midwest fell 6.0 percent to 78.6 and is 13.8 percent below May 2007. In the South, the index dropped 7.1 percent in May to 84.5 and is 22.1 percent below a year ago.
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The American consumer is maxed out
July, 2 at 10:17 am
More disturbing news about the American consumer. CNBC reports the following:
Home Equity Credit Line Delinquencies at New High
Late payments on U.S. home equity lines of credit rose to a 21-year high in the first quarter of 2008 due to continued stress in the housing market and general weakness in the economy, the American Bankers Association said Wednesday.
In its quarterly report on consumer borrowing, the bankers group said the percentage of home equity lines that were more than 30 days past due rose to 1.1 percent from 0.96 percent the prior quarter.
That rate is the highest since the ABA started collecting the data in 1987.
“It was a tough quarter for some people,” said ABA chief economist James Chessen in a statement. “Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt.”
Also, according to CNN Money:
Payroll report: 79,000 private sector jobs lost in June
The National Employment Report from Automatic Data Processing showed a 76,000-job drop for goods-producing businesses, the 19th monthly decline in a row, coupled with a 3,000 job decline in the services sector.
A majority of the production job losses came from the manufacturing sector, which lost 44,000.
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The White House, Congress, and Jingle Mail
June, 30 at 4:16 pm
TAKE ACTION!!!
Our friends from StopTheMortgageBailout.com have started a movement to show Congress and President Bush our disapproval with the housing bailout plan currently being discussed in Congress. Unfortunately, it seems like Congress refuses to listen to the millions of responsible citizens who didn’t buy more house than they could afford and don’t want our tax dollars to pay for irresponsible lenders and speculators.
Here is the press release from StopTheMortgageBailout.com
Let Congress Hear You!!!
Enough playing nice. . . its time to make a statement. Since Congress has chosen to ignore fiscal and moral responsibility in favor of a BAILOUT, we need to send a clearer message.
Along with Patrick.net, NationalBubble.com, and many of the bloggers listed below, we call on you all to send Senator Shelby (the ranking republican senator who previously was against the bill but caved) and President Bush an envelope with at least two spare keys in it.
Here are the addresses:
Senator Richard Shelby
Re: STOP THE HOUSING BAILOUT BILL!!!
110 Hart Senate Office Building
Washington, DC 20510President George W. Bush
Re: STOP THE HOUSING BAILOUT BILL!!!
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500This should cost you two stamps in postage, but could save us all billions in the long run.
PLEASE NOTE: These envelopes need to go out IMMEDIATELY to have any effect; Congress will be voting on the bill when they get back from the July 4th vacation!
Posted in Bailout News, Mortgages, The Economy, Real Estate | No Comments »
The bright side of a recession
June, 28 at 11:00 am
Although it might not fit the technical definition of a recession (2 consecutive quarters of negative growth), there is no doubt that most Americans already feel like we are in one.
But a recession doesn’t have to be a bad thing. Some of the most successful businesses were started during a recession.Also, a recession is a great time to get good bargains and to reconnect to what is really important in your life.
So I thought I would share with you guys this great article I found on Bankrate. com.
Happy Slowdown!
However, economists tell us there are some reasons to actually welcome and perhaps even embrace a recession. After all, a recession is the ebb part of the natural ebb and flow of the U.S. economy.
Just as surely as hot markets cool and bulls turn to bears, capitalist economies take a breather every so often to pause and reflect. If they didn’t, these corrections would be far crueler.
So, let’s smile, lift our half-full cups of regular unleaded and toast these 10 very good things about impending bad times.
10 Reasons to Love a Recession (according to Bankrate.com)
Family Dinners
Shorter Lines at the Pump
Less Junk Mail
More Coupons
Free Fitness
Bargain SUVs
Business Startup Opportunities
Growth in Gardening
Musical Inspiration
New Perspectives
Perhaps the greatest boon of a recession is the time to reflect and reassess the true meaning and goals of our lives.
Look, recessions are just a part of the regular business cycle. One of the problems in this country is that we always try to avoid pain and we look for the government to bail us out every time we get in trouble. Let’s the market do its thing and before we know it, we’ll be back to the good old days of prosperity.
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Housing correction steep and swift
June, 26 at 12:03 pm
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Existing home sales rose 2% in May but prices continued to fall
June, 26 at 10:09 am
The National Association of Realtors just reported the existing home sales numbers for May.
According to CNBC:
Existing-Home Sales Rise 2% in May, Above Forecasts
Sales of existing homes in the United States rose 2% in May from the previous month to a 4.99 million-unit annual rate, the National Association of Realtors said, slightly beating analysts expectations.
The inventory of homes for sale shrank by 1.4 pct to 4.49 million homes or a 10.8 months’ supply at the current sales pace.
Meanwhile, the median national home price declined 6.3 percent from a year ago to $208,600.
This is how Bloomberg reported the news:
A drop in property values may have spurred demand in some of the most distressed areas, such as California and the Midwest. Even so, rising mortgage rates, a glut of unsold homes, and stricter borrowing rules indicate the real estate recession will persist for most of the year.
“Although it looks like it’s improving, the housing market still has a long period of adjustment,” said Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, who forecast sales would rise to a 5 million pace. “There is still a huge imbalance” between sales and inventories.
April’s matched a record low for existing home sales.
Compared with a year earlier, sales were down 16 percent in May.
Other reports today showed that firings remained elevated last week and the economy grew in the first quarter at a faster pace than previously estimated.
Jobless Claims
Initial jobless claims were unchanged at 384,000, according to the Bloomberg survey median. The total number of people collecting benefits rose by 82,000 to 3.139 million in the week ended June 14, the highest since February 2004.
USA Today had this to say:
The National Association of Realtors said Thursday that sales of existing single-family homes and condominiums rose 2% to a 4.99 million annual rate last month.
It was only the second sales increase in the past 10 months, but it was not viewed as a sustained rebound. Many economists believe prices will have to fall further before the housing industry can mount a sustained recovery.
The median price of an existing home sold in May dropped to $208,600, down 6.3% from a year go. That was the fifth biggest year-over-year price decline in records that go back to 1999. At the median, half of homes sold for more, half sold for less.
The inventory of unsold homes dropped 1.4% to 4.49 million units, which represents a 10.8-month supply at the May sales pace, down from an 11.2-month supply in April. That’s still about double the inventory level that existed during the five-year housing boom.
“Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets,” said Lawrence Yun, the Realtors’ chief economist.
However, rising mortgage foreclosures are dumping even more homes onto the already glutted housing market.
These are some interesting parts in the NAR report:
Lawrence Yun, NAR chief economist, said there’s still a lot of inventory in the market. “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,”
Here notice how the guy from the NAR is trying to make sure that Congress still approves the bailout plan. In other words, provide the drug addict (the American consumer) with his fix (more easy money) so they can keep buying homes and making the NAR and its members rich.
“Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing,” Yun said. “It’d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”
Take a look at the huge price drop in the West: 16% Ouch!!!
Existing-home sales in the West increased 2.0 percent to an annual pace of 1.02 million in May, but are 12.8 percent below a year ago. The median price in the West was $286,600, which is 16.0 percent lower than May 2007.
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