what are the banks going to do with all of these houses?

January foreclosures up 57%
Filings saw yet another big jump last month, compared to levels a year ago; 45,327 homes were lost to bank repossessions.
By Les Christie, CNNMoney.com staff writer
February 26 2008: 8:40 AM EST

NEW YORK (CNNMoney.com) -- Foreclosure filings nationwide soared 57% in January over the same month last year - another indication that the nation's housing woes are deepening.

A study released Tuesday by RealtyTrac, an online marketer of foreclosure properties, showed that 233,001 homes were affected, 8% more than in December. Of that total, 45,327 homes were lost to bank repossessions.

The only good news was the comparatively modest month-to-month increase in total filings.

"It could be that some of the efforts on the part of lenders and the government - both at the state and federal level - are beginning to take effect," said James Saccacio, RealtyTrac's chief executive.

"The big question is whether those efforts are truly helping homeowners avoid foreclosure in the long term, or if they are just forestalling the inevitable for many beleaguered borrowers," he said.

Many mortgage-assistance efforts simply give borrowers a chance to pay off missed payments, rather than lowering monthly payments, which effectively just delays foreclosures. But now lenders claim they are restructuring more mortgages by lowering or freezing interest rates and reducing balances. These solutions are much more likely to help people save their homes.

Nevada, California and Florida had the highest foreclosure rates in the nation. During the housing boom, all three states recorded big price run-ups, and saw a large proportion of homes sold to investors. In Nevada, one of every 167 homes was in some foreclosure stage last month.

California had the largest total number of foreclosures among the states. There were more than 57,000 foreclosure filings there in January, one for every 227 homes. Florida trailed well back in total foreclosures with 30,000, but its rate of one for every 273 households was only slightly behind its West Coast rival.

Several states recorded massive jumps in foreclosure activity in the last twelve months. In Rhode Island filings rose 279%; in Maryland they spiked 430%; and in Virginia they leapt 634%.

All three of those states had fairly modest rates to begin with. In Virginia, for example, even with that whopping increase, the rate, overall, was one in every 617 homes, about a quarter the rate in Nevada.

Eighteen states substantially improved since last January. In Pennsylvania, foreclosure filings fell 55% to just 1,683, one for every 3,226 households. West Virginia recorded a drop of 54% to a miniscule 53, one for every 16,667 households. And Vermont's total dropped in half, from two to one.

Foreclosure and lending laws vary greatly from state to state, and that can have a huge impact on foreclosure rates. But most places have been recording ever-higher foreclosure numbers as home prices stagnated, and the effects of many of the non-traditional mortgages issued during the boom years took hold.

Subprime, hybrid adjustable rate mortgages, with interest rates that reset to much higher, often unaffordable levels after a two or three year period of low rates, caused many borrowers to default.

Even more exotic products, such as interest-only loans, where balances don't shrink, or, worse yet, option ARMs, where balances grow, also contributed to foreclosure problems.

Those products have just about disappeared from the marketplace today and that should, eventually, lead to healthier foreclosure statistics in the future. But, before that happens, real estate markets will have to improve and, according to many experts, that's not likely to happen much before the end of 2009.

Merrill Lynch, for example, is forecasting home prices will fall by 15% in 2008 and another 10% in 2009. That will likely continue to fuel high foreclosure rates.

 

WOW.

$500k home in 2007, $382k home in 2009.

Honestly, if those folks put very little down, they should default. It makes more sense to have bad credit for awhile and make the bank take the hit. Otherwise, all they're doing is paying rent to the bank on a property they have to maintain until they sell it for what they owe.

The banks hope that they don't do that. All these 'efforts to help homeowners' are not, they are efforts to help banks.

 

Easy, you ask Congress for a bailout that you don't call a bailout. You let the government own the loans and the homes.

http://www.nytimes.com/2008/02/23/business/23housing.html?_r=2&pagewanted=1&oref=slogin

 

Damn great time to buy a house.

 

wait one more year. Everything will be in the shitter and the banks will be looking to hand out mortgages left and right to spend our way out of this mess.

 

I don't know what's going to happen. I was told today that ALL 100% mortgages will be gone in late March. That'll cut out a shit ton of buyers.

 

and the right time to sell, too.

sell, rent for 2 years, buy your house back.

 

Can't ever be a good time to buy and sell, can it?

 

Too late. Or too late for here at least. Peak here was spring 2006. If I had sold my house instead of refinancing it that spring I would’ve done pretty well. Now? Not so much.

Jingle mail, jingle mail, jingle all the way…… the question is how many of these folks are there?

http://calculatedrisk.blogspot.com/2008/02/ruthless-defaults-in-msm.html

http://calculatedrisk.blogspot.com/2008/02/lets-talk-about-walking-away.html

I’ve followed our neighborhood sales since we moved in. We’ve already dropped 15-20% from the 2006 peak. Another two years of that? Yikes.

 

They're going to be sold to investers. I'm going to buy one for me as well.