New wave of foreclosures by end of 2010 is feared

[heli]

http://www.latimes.com/business/la-fi-mortgage-mods17-2010feb17,0,7573498.story

New wave of foreclosures by end of 2010 is feared
About 4 million U.S. homeowners are 90 days or more delinquent on their loans or in foreclosure proceedings, Moody's Economy.com says. A federal loan modification program is helping a relative few.
By Jim Puzzanghera and Don Lee

Experts fear that a new wave of foreclosures will hit this year as prolonged unemployment makes it difficult for millions of homeowners to pay their mortgages -- and many of them aren't likely to get much help from a federal program aimed at keeping them in their houses. Banks participating in the Home Affordable Modification Program, announced a year ago this week by President Obama, have been slow to turn temporarily reduced mortgage payments into permanent ones. "The overarching sense is that the mortgage modification process has not worked that well," said Bert Ely, an independent banking consultant.

Obama administration officials acknowledge that the $75-billion program, which offers banks cash incentives to reduce payments, has had growing pains, and they said they were considering revisions to make it more effective. Bank of America Corp., the nation's largest servicer of mortgages, said Tuesday that it had increased the number of permanent mortgage modifications to 12,700 last month from 3,200 in December. BofA said an additional 13,700 permanent modifications were in their final stage. But that's a drop in the bucket considering that BofA holds about 1 million mortgages that are at least 60 days delinquent. About 4 million homeowners nationwide are 90 days or more delinquent on their mortgages or in foreclosure proceedings, according to Moody's Economy.com.

Trial modifications and other delays have kept many of those mortgages out of foreclosure, but by the end of this year, 2.4 million borrowers are expected to lose their homes, said Celia Chen, a housing economist at Economy.com. That would be up from 2.1 million foreclosures and short sales last year and five times the annual numbers earlier in the decade. It's unclear when those distressed properties would hit the market, but their large numbers are likely to push home prices back down this year, to a bottom in the fourth quarter, Chen said. And that would make things worse for the 25% of homeowners who already owe more on their mortgages than their houses are worth.

The biggest blows will be felt in California, Florida, Nevada and other states where home prices have dropped the most and the ranks of struggling homeowners have swelled. As of December, 11.4% of California homeowners were 90 days or more late on their loans, according to First American CoreLogic, a Santa Ana real estate data firm...

[gratuitous]

1. This isn't over by any means

And as long as mortgage holders cling to the full price of the overvalued properties they wrote loans for, it's not going to get any better.

[leftofcool]

3. The one good thing is that many forclosures are being bought

rather quickly. Not so much in the beginning but I am beginning to see many "sale pending" and "under contract" notices on the ones we have looked at, They are still slow to sell in the most hard hit areas though. At least the mortgage companies are starting to lend again. I hope more modifications will be done so people can keep their homes.

[Great Bear]

2. Many folks that were still in denial are now getting their

Property tax assessment forms reflecting the "new normal" valuations. It's like opening your K statement and seeing how decimated it is.

Why bother when you're so far underwater you can't see light?

[upi402]

4. not behind -no help. behind cuz no job - no help

banksters, and the WH who loves em