Home Foreclosure Rates Soar

Foreclosure rates soar in 2007 and looks to increase in 2008.

The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the previous year, a real estate tracking company said Tuesday. Many homeowners started to fall behind on mortgage payments in the last three months, setting the stage for more foreclosures this year.

About 1.3 million homes received foreclosure-related warnings last year, up from 717,522 in 2006, Irvine-based RealtyTrac Inc. said. Foreclosure filings rose 75 percent from the previous year to 2.2 million.

More than 1 percent of all U.S. households were in some phase of the foreclosure process last year, up from about half a percent in 2006, RealtyTrac said.

Nevada, Florida, Michigan and California posted the highest foreclosure rates, the company said.

The filings included notices warning owners that they were in default, or that their home was slated for auction or for repossession by a bank. Some properties may have received more than one notice if the owners had multiple mortgages.

A late-year surge in the number of properties reporting foreclosure filings suggests that many are in the initial stages of the foreclosure process and could end up lost to foreclosure this year unless lenders or the government steps in, RealtyTrac said.

"It does appear that we're seeing a new batch of properties enter the process," said Rick Sharga, RealtyTrac's vice president of marketing.

Countrywide says Foreclosures Highest on Record

Regardless of how many times Neil Cavuto or any other financial pundit tells you how peachy the housing market is, the reality is far different.

Countrywide Financial Corp (CFC.N), the largest U.S. mortgage lender, said on Wednesday that foreclosures and late payments rose in December to the highest on record, though it made more loans than expected in the fourth quarter.

Its shares fell as much as 20.2 percent as concern persisted that Countrywide might seek bankruptcy protection. The shares fell 27.4 percent on Tuesday though Countrywide rejected an identical rumor.

"Rumors of bankruptcy are still surrounding Countrywide," said William Lefkowitz, options strategist at brokerage firm vFinance Investments. "Investors still believe that they need an infusion of capital."

In its monthly operating report, Countrywide said the foreclosure rate among the 9.03 million mortgages for which it collects and processes payments doubled to 1.44 percent from 0.70 percent a year earlier, and rose from November's 1.28 percent. The delinquency rate rose to 7.20 percent of unpaid balances from 4.60 percent a year earlier.

National Association of Realtors- Housing to Stabilize

The National Association of Realtors announced today that the housing market is on the verge of stabilizing and forecasts bright times ahead

Bucking conventional wisdom, a trade group for real estate agents on Monday said the battered housing market is on the verge of stabilizing and inched up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million — the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year.

The Realtors' group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million.

Numerous other economists, however, are far less optimistic than the trade group. They predict weak sales and falling prices through next year and beyond and emphasize that those problems could worsen if the economy sinks into a recession.

Looking back, I vaguely remembered this same trade group making a big announcement last year in regards to the housing market.

The key word for the housing market in 2006 is balance, with a return to a more normal rate of price growth, according to the National Association of Realtors®.

David Lereah, NAR's chief economist, said current trends in the housing sector are healthy. "We don't need to break a record every year for the housing market to be good - in fact, cooling sales are necessary for the long-term health of this vital sector," Lereah said. "A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong."

The National Association of Realtors must have the biggest pair of rose-colored glasses on the planet. Believe what you will, but beware the rosy projections coming from this 'trade group'.

**Update: Check out this site to see the foreclosures in your area. Healthy market, indeed.

The Mortgage Crisis Continues

The bad news just continues.

Borrowers who took out loans in the first six months of this year are already falling behind on their payments faster than those who took out loans in 2006, according to a report from Arlington, Va.-based investment bank Friedman, Billings Ramsey. That's making it even harder for would-be buyers to get new mortgages — a frightening prospect for home builders with projects going begging on the market, and for homeowners desperate to unload property to avoid defaulting on their loans.

Meanwhile, the number of U.S. homes in foreclosure is expected to keep soaring after more than doubling during the third quarter from a year earlier, to 446,726 homes nationwide, according to Irvine, Calif.-based RealtyTrac Inc. That's one foreclosure filing for every 196 households in the nation, a 34 percent jump from just three months earlier.

Such data suggests more Americans could lose their homes than ever before, and those in peril are people who never thought they'd welsh on a mortgage payment. They come from a broad swath — teachers, pharmacists, and civil servants who were lured by enticing mortgage terms.

The article cited, Have we seen worse of mortgage crisis?, makes it clear that the worst of this crisis is far from over.