Foreclosures jump for seventh straight quarter

[babylonsister]

Foreclosures jump for seventh straight quarter
Tue Apr 29, 2008 7:15am EDT

By Lynn Adler


NEW YORK (Reuters) - Home foreclosure filings jumped 23 percent in the first quarter from the prior quarter, and more than doubled from a year earlier, as more overextended borrowers failed to make timely payments, real estate data firm RealtyTrac said on Tuesday.

One of every 194 households received a notice of default, auction sale or bank repossession between January and March, for the seventh straight quarter of rising foreclosure activity, RealtyTrac said.

Foreclosure filings were far-reaching, rising on an annual basis in 46 states and in 90 of the 100 largest metropolitan areas, to a total of 649,917 properties. The first quarter filings surged 112 percent from the same period last year.

"In most of the states with the highest levels of foreclosure activity, we're still seeing the fallout from overheated home prices and people overextending themselves with risky loans to try to buy those properties," Rick Sharga, vice president of marketing at RealtyTrac, in Irvine, California, said in an interview.

"I'm more convinced that we haven't seen the peak of foreclosure activity yet, and the wave probably won't crest until late third or fourth quarter of 2008," he added.

more...

http://www.reuters.com/article/ousiv/idUSN2848824620080429?sp=true

[notesdev]

1. try 2011

>"I'm more convinced that we haven't seen the peak of foreclosure activity yet, and the wave probably won't crest until late third or fourth quarter of 2008," he added.

More real estate industry Pollyannaism ('vice president of marketing' being your tip-off).

You just wait until everyone is as familiar with the term "Alt-A" as they are now with the term "subprime".

The RE industry/financial industry as a whole really screwed the pooch in a major, major way, and anyone who tells you daylight is on this side of the turn of the decade is either lying to you, lying to himself, or is truly and stunningly ignorant of the underlying fundamentals.

[Warpy]

2. All the jumbo loans issued in 2006

which was the dying gasp of the go-go real estate market, will be resetting through 2009. These were loans over $450,000, mostly ARMS and interest only loans and more than a few "liar loans" issued to people with absolutely no expectation of paying them, and most of them issued in California, Phoenix, Las Vegas, and Florida to people caught up in mob psychology that told them to get a house at any cost because there would be no way to get one tomorrow.

What will keep the market in the pits after the massive wave of foreclosure on people who should never have been in the market in the first place is an oversupply of unsold housing combined with a general economic slowdown brought by the end of cheap credit and the ability to finance a middle class lifestyle on debt. Even if the new government shocks me by re instituting all the New Deal programs and turning the economy around quickly (as likely as the Pope on a pogo stick), there will still be an oversupply of housing, mostly the wrong type of housing, yuppie trophy houses, and it will take at least 5 years for the market to turn around. Right now, I'm looking at a minimum of a 10 year turnaround and a more likely 20 year period of doldrums.

So yes, all the happy talk from the industry has gone beyond mere self delusion. It's pretty obvious that people aren't buying it any more than they're buying houses they can't afford.

What should be on the housing industry's mind is how to keep foreclosed properties occupied and kept up, not how to sell them to a public that has finally realized it's not time to buy, using those real estate licenses to set up companies to oversee rentals instead of scamming consumers by finding them loans no sane person would ever take on were they to know all the facts.

Until then, anybody who believes a word they say is as nuts as they are.

[Tangerine LaBamba]

3. What's Alt-A?

I'm so out of touch........

[notesdev]

4. Alt-A are otherwise known as "liar loans"

They're the notch above subprime, and just barely less risky. They're known as "liar loans" because, except in rare cases, the borrower could name any income figure necessary to be qualified for the loan, and nobody would actually check to see if they were telling the truth.

Anyway, the Alt-A problem is going to be bigger than the subprime; not only are there slightly more of them, but the Alt-A group has taken a valuation hit that the subprime hadn't before the collapse of the latter group.

Here's some good reading on the subject:
http://globaleconomicanalysis.blogspot.com/2007/07/alt-word.html

I really like that author; you can go back years and see that he was spot on in noting problems that the mainstream financial world ignored, and he's good at explaining complex economic concepts in layman's terms.

[Tangerine LaBamba]

6. Well, thank you very much

I greatly appreciate the explanation and the link. I'll read it shortly.

But, I believe in giving as well as getting, and so I recommend to you, if you're interested in watching how the media screwed up its responsibilities and colluded with the government in this Iraq horror, get yourself a copy of "So Wrong For So Long," by Greg Mitchell - http://tinyurl.com/2bouue.

It's brilliant. I cannot put it down.

Thanks again.

[spinbaby]

5. California prices are down 30% in one year

Per Dr. Housing Bubble.

http://www.doctorhousingbubble.com/

No wonder people are abandoning houses.

[OhioChick]

7. K&R

:kick:

[Quantess]

8. Not surprising at all.

Arguably, the mortgage crisis is where the recession began.
The chickens are coming home to roost.