US foreclosure filings jump as moratoriums end

[Guest guest]

The smoke from the smoke and mirrors tactic has now lifted. Once again we see

the economy for what it is.

Now what?

Are Democrats going to throw more money at the problem? Their programs which

prevent foreclosures have already strangled the banks as it is.

Administrator

http://www.reuters.com/article/wtUSInvestingNews/idUSNYS00499920090416

US foreclosure filings jump as moratoriums end

Thu Apr 16, 2009 12:00am EDT

By Lynn Adler

NEW YORK, April 16 (Reuters) - U.S. foreclosure activity leaped 46 percent in

March from a year earlier, hitting a record high as programs stunting the torrid

pace of failing mortgages expired, RealtyTrac reported on Thursday.

A temporary freeze on foreclosures by major banks and government-controlled home

finance companies Fannie Mae and Freddie Mac ended before President Barack

Obama's massive housing stimulus, unveiled on March 6, could take root.

Filings, which include notice of default, auction sale or bank repossession,

jumped 17 percent in March from February.

Filings for the quarter also marked a record high, jumping 24 percent from the

same period a year ago.

The March and first-quarter totals were the highest since RealtyTrac began

tracking them in January 2005, even as bank repossessions declined.

One in every 159 U.S. households with mortgages got a foreclosure filing in the

first three months of this year, RealtyTrac said. Filings were reported on more

than 803,000 properties in the quarter.

California, Florida, Arizona, Nevada and Illinois accounted for nearly 60

percent of U.S. foreclosure activity in the first quarter, with a combined

479,516 properties receiving filings.

In the transition from industry freeze to new government rescues, the

foreclosure filing floodgates reopened.

After the moratoriums ceased, " we saw an onslaught of notices of default, which

is the first stage of foreclosure, " Rick Sharga, senior vice president at

RealtyTrac, said in an interview.

The rise in filings suggests a backlog had built up due to the moratoriums. The

success of the Obama mortgage bailout may not be seen until the autumn, Sharga

added.

Activity should peak near year-end. " But unfortunately, these well-intentioned

delays in the processing might have the unintended consequence of extending the

housing downturn, " and further dragging down home prices, he said.

" We still anticipate that we'll see upward of 3 million households receive a

foreclosure notice this year, up from 2.4 million last year, " Sharga said.

For all of 2005, the last year before the foreclosure spike started in earnest,

RealtyTrac reported about 800,000 filings.

Loan servicers are overwhelmed with the volume of failing home loans and many

are understaffed to handle modifications.

One national servicer that foreclosed on 2,000 properties in 2006 handled about

21,000 the next year with similar staffing levels, Sharga said. The servicer

expects a 50 percent spike in 2008, without approval to increase staff.

UNEMPLOYMENT MAY TRUMP BARGAIN HUNTING

Nevada, Arizona and California had the highest foreclosure rates in the first

quarter.

Homes prices and sales soared in these states during the boom years earlier this

decade, and now suffer the biggest losses on overbuilding and abandoned

investment units.

Nevada led the ranks in the quarter, with one of every 27 households with loans

getting a filing, more than five times the national average.

Florida, Illinois, Michigan, Georgia, Idaho, Utah and Oregon were the other

states with the highest foreclosure rates.

Households with loans in California represented almost 29 percent of the

quarter's total filings, up about 35 percent from last quarter and from a year

ago. Nearly 231,000 units received a filing, the state's highest-ever quarterly

total.

One silver lining is the growing demand from first-time buyers and investors for

these distressed homes, which is helping put a floor under the worst housing

market since the Great Depression.

" But it's unlikely that this increased demand will be enough to offset the

growing number of foreclosures in the pipeline, accelerated by rising

unemployment rates, " J. Saccacio, chief executive of RealtyTrac, said in a

statement. (Editing by Adler)