Foreclosures Fall From December To January

WASHINGTON — The number of Americans on the verge of losing their homes fell in January but was still up from the same month a year ago. The numbers would have been higher if not for efforts to stall the foreclosure process.

Nationwide, more than 274,000 homes received at least one foreclosure-related notice last month. That was down 10 percent from December, but still 18 percent higher than a year ago, according to RealtyTrac Inc., an Irvine, Calif-based foreclosure listing service.

Contributing to the monthly drop was a decision by government-controlled mortgage finance companies Fannie Mae and Freddie Mac to suspend foreclosure sales during the winter holidays. Plus, Florida Gov. Charlie Crist brokered a deal in which lenders in that state agreed to a 45-day halt to new foreclosure petitions.

But those efforts may not have much of an impact in the long run.

"If you don't do anything to get to the core problem, all you're doing is extending the housing downturn," said Rick Sharga, RealtyTrac's vice president for marketing. "It's only a good idea if there's a corresponding program that dramatically restructures hundreds of thousands of loans."

Meanwhile, a federal regulator on Wednesday urged more than 800 thrift institutions to suspend all foreclosures while President Barack Obama's top economic officials develop plans to keep borrowers in their homes.

The Obama administration plans to spend $50 billion to combat foreclosures of owner-occupied, middle-class homes but is divulging few details. An announcement of the administration's housing plans is expected in the coming weeks.

Testifying before House lawmakers on Wednesday, Treasury Secretary Timothy Geithner said the government would provide incentives to "try to induce economically sensible restructuring of mortgages," but offered no specifics.

Story continues below

advertisement

More than 2 million American homeowners faced foreclosure proceedings last year, and that number could soar as high as 10 million in the coming years, according to a report last month by Credit Suisse, depending on the severity of the recession.

The RealtyTrac report said nearly 67,000 properties were repossessed by lenders in January as the worst recession in decades, falling home values and stricter lending standards continue to sap the U.S. real estate market. That was up from more than 45,000 repossessed properties in January 2008, but down from 79,000 in December.

Geithner and Shaun Donovan, the new secretary of the Department of Housing and Urban Development, met with officials from housing and other nonprofit groups, top bank executives and industry lobbyists Wednesday to hear proposals for how the new programs to fight foreclosures should be structured.

After the meeting, John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer group in Washington, said he was optimistic the new administration would agree to use government dollars to buy up mortgages and remove them from complex mortgage-linked securities and restructuring them at more affordable levels.

He said support from government and industry officials for that idea was a "giant step forward" compared with opposition to such an approach by the Bush administration.

The Obama administration is also expected to back a push in Congress _ opposed by the mortgage industry _ to let bankruptcy judges alter the terms of primary home loans. Earlier this week, Obama said it "makes no sense" that judges are not allowed to do so. The mortgage industry argues that this prohibition allows lenders to charge lower rates.

In the RealtyTrac report, Nevada, California, Arizona and Florida had the nation's top foreclosure rates. In Nevada, one in every 76 homes received a foreclosure, while the number was one every 173 in California. At No. 5, Oregon, formerly a bastion of housing stability, made its first appearance close to the top of the list of foreclosure hot spots.

Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho and Ohio. Among metro areas, Merced, Calif., was first, with one in every 59 housing units receiving a foreclosure filing. It was followed by Las Vegas and the Cape Coral-Fort Myers area in Florida.

___

On the Net:

RealtyTrac Inc.: http://www.realtytrac.com

Comments

[uncleentropy]

Nevada, California, Arizona, Florida, Oregon...These facts sure get in the way of blaming poor people for the mortgage meltdown.

And before we begin stoning the middle class homebuyers for being stupid, they were told that they could refinance and receive better terms before the ARM since their lovely asset would be worth so much.

It is still wrong to lie to a gullible person.

[KillTheMessenger]

Please take a look at the map with foreclosures. You will see that most properties are in working class and lower middle class neighborhoods. Alternatively you can count the number of foreclosures in upper middle class and rich neighborhoods. There are few or even none. What does that tell you? It tells you that the upper middle class and rich people are not foreclosing, which means they are still paying their mortgages, which means that their mortgages are not part of the toxic asset load of the banks.

QED

[kcnativnla]

I'm in Los Angeles, where the median income is in the mid $50's, while the median home price rose to almost $600k. My wife and I were offered $800k from a mortgage company to buy a house, but we did the responsible thing. I'm as liberal as they come (I even work in "Hollywood")...but I feel NO SYMPATHY for these greedy people who snatched up prime real estate and artificially inflated the market while my family moved to a townhouse because we couldn't afford those rediculous prices.

Now my wife and I are going forclosure shopping and buying discounted flat screen TV's while Rome burns. That's what you get to do after you've suffered through 5 years of watching people be stupid.

[KillTheMessenger]

There you go. We do the same thing. We have perfect credit, but until the market comes down from its self medicated drug high, we are not buying.

[MSaxe]

I guess if they "suspend foreclosures" the numbers should go down...right?

[AnnfromCA]

Another bit of news...retail sales up 1 percent. Interesting, eh?

[KillTheMessenger]

Sounds like this is just a short term halt on foreclosures. From that it would follow that the rate will have to be higher in the following months to make up for the slight reduction in January. So unless we make some more permanent changes to the system this is purely cosmetic.

[denny8844]

In December the total of foreclosures initiated in just 10 counties in 4 states (California 4, Florida 4, Arizona 1 and Nevada 1) was greater than the total initiated in 40 other states. Until now it has been a crisis that is mostly regional and caused mostly by the use of subprime loans and exotic mortgages like the option adjusted rate mortgage, But now with unemployment rising there are going to be other conditions and factors that will excacerbate the forclosure problem.

[KillTheMessenger]

Sounds pretty scary. I guess people are just looking for a "breather", anything that looks like "good news" or a reversal of steep downward trends. Do you happen to know what the average time between a homeowner getting laid off and a foreclosure is? And is there a statistic about the likelihood of a person who lost their job also losing their home? There might not be reliable numbers since these scenarios are probably extremely dependent of the length of unemployment and that must have changed greatly over the past year or so.