Archive for June 30th, 2011

Delinquencies Outnumber Foreclosures 50:1

Think the foreclosure crisis is winding down?  Take a look at this article, below. 

There were 4,084,557 mortgages in the United States 90 or more days delinquent or in foreclosure as of the end of May, according to Lender Processing Services (LPS).

With foreclosure sales at 78,676 at month end, the volume of seriously past due loans over-shadowed the number of completed foreclosures by 50 to 1, according to LPS’ May Mortgage Monitor report released Wednesday.

In fact, the company says there are still significantly fewer foreclosure sales than there were before foreclosure moratoria were put into place last fall, and they’re declining.

LPS’ May data shows that the biggest drops in foreclosure sales have been seen along the East Coast. Since September 2010, foreclosure sales have declined 96 percent in Washington D.C., 80 percent in Maryland, 79 percent in New York, and 75 percent in New Jersey.

Additionally, LPS’ analysis found that inventories of foreclosures in judicial states have increased twice as much as inventories in non-judicial states over the last year as courts have become clogged with high volumes of cases and lenders have slowed their processing of foreclosures, particularly in judicial areas muddled by affidavit issues.

Nationwide, the average time spent in foreclosure continues to extend, with more than 33 percent of borrowers in foreclosure not having made a payment in over two years, according to LPS latest study.

LPS says overall delinquencies are almost double and foreclosures are eight times higher than historical norms.

New problem loans though, defined as loans that were current six months ago and were 60 or more days delinquent at the end of May, are now less than half the peak levels seen in 2009, and are currently at 1.27 percent.

LPS says negative equity, however, remains a concern, with nearly 30 percent of current loans underwater.

The equity impact on new seriously delinquent loans is especially pronounced, with mortgages significantly underwater defaulting up to 10 times as much as loans with equity, according to LPS.

The company’s Mortgage Monitor Report is based on performance information from its loan-level database of nearly 40 million first liens across the spectrum of credit products.

Mark Stopa

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The Result of Expediting Foreclosures

In response to repeated arguments from Wall Street that an accelerated foreclosure process is necessary to improve the economy, many consumer advocates and foreclosure defense attorneys have been asking:

If all of the properties are foreclosed, who is going to buy them?

The answer, of course, is nobody.  Quicker foreclosures just means more homes are vacant sooner, with many of these vacant homes falling into serious disrepair. 

Unfortunately, not everyone agrees, and many banks, lawyers, and judges have worked to push through foreclosures at a breakneck speed.  Want to see the results? 

Read this article, and check out the photograph of the Tampa home littered with trash.

Mark Stopa

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