Foreclosure Rates Continue Their Steady Decline

In October the number of U.S. properties for which a foreclosure filing was received declined for the third month sequentially according to a RealtyTrac report released on Wednesday. The report is a further indication that foreclosures are beginning to subside and that the housing sector is stabilizing.

According to the report, total foreclosure filings in October dropped 3.3% from September.

Several foreclosure-laden states are seeing glimmers of hope in the October data. Nevada -- one of the hardest hit states in terms of foreclosures in the past year -- saw filings actually fall 4% from a year ago, the first ever year-over-year decline in the state since RealtyTrac began recording their foreclosure statistics in 2006. Florida also saw a 4% drop -- also the first year-over-year decline in that state since July 2006.

Wednesday's positive foreclosure news is yet one more result of the improving housing sector.

Comments

[j-dub:]

We are IN BETWEEN the devastation of the sub prime storm and the decimation of the alt-a/option arm disaster.
Otherwise, what great news!!!!

Nov 12 07:29 AM

[Rob_W_:]

And the data you are supporting this conclusion with are .... ? I think it is pretty clear that the current meltdown in the RE market is turning around. That doesn't mean that continued economic weakness won't cause NEW problems, but beating the drum that we have only seen "the beginning" is beginning to look as silly as the year long "this ain't a rally, just you wait and see" crowd.

--RW

On Nov 12 07:29 AM j-dub wrote:

> We are IN BETWEEN the devastation of the sub prime storm and the
> decimation of the alt-a/option arm disaster.
> Otherwise, what great news!!!!

Nov 12 07:53 AM

[elated7:]

NYT has editorialized foreclosure problem. There is no such thing as a steady decline. Please do not distort the facts.

Nov 12 08:01 AM

[Thomas Smic...:]

Nationally, there are a large number of foreclosed properties banks have not even begun to market. Resets of mortgages for homeowners this year are expected to default (again) in 2010 at a rate as high as 70%. Home buyer traffic trended down in late October as the first round of tax credit purchases was about to expire. Many are predicting that the Congressional extension will not have as big a pop as the first program. Unemployment is very, very high. Novice investors who stepped to the plate to buy foreclosures as rental properties with little or no management experience are already seeing vacancy rates go up and discovering that being a landlord is not just owning a piece of brick and mortar.Etc., etc.

Being in the business as a builder, property manager and landlord, I submit that the housing situation is nowhere near a satisfactory conclusion..

Nov 12 08:36 AM

[j-dub:]

check out the first chart:

www.doctorhousingbubbl.../


On Nov 12 07:53 AM Rob_W_ wrote:

> And the data you are supporting this conclusion with are .... ? I
> think it is pretty clear that the current meltdown in the RE market
> is turning around. That doesn't mean that continued economic weakness
> won't cause NEW problems, but beating the drum that we have only
> seen "the beginning" is beginning to look as silly as the year long
> "this ain't a rally, just you wait and see" crowd.
>
> --RW
>
> On Nov 12 07:29 AM j-dub wrote:

Nov 12 08:50 AM

[The Good Ne...:]

<img class="authors_reply" src="static.seekingalpha.co...">


@Thomas,

>Being in the business as a builder, property manager and
>landlord, I submit that the housing situation is nowhere near a
>satisfactory conclusion..

I too am a property manager and landlord in multiple markets across the country. I certainly agree that the housing situation is nowhere near a satisfactory conclusion, however it has clearly started to improve significantly since spring in many markets.

I reject the notion that there is this phantom wave of foreclosures waiting to slam the market... if that is the case just what are the bankers and their agents waiting for?

As a landlord since the 80's, I have not experienced (nor can I imagine) a better time than now to increase my holdings in residential rentals.

@j-dub,
When you look at mortgage resets charts, just remember that with rates at the levels they are now, that resets actually turn out to result payments and rates LOWER than what was set at origination. The doomster charts on ALT-a resets always fail to factor that "minor" landscape change... these ain't your father's ARM resets.

Nov 12 09:17 AM

[AJMB:]

This is very true that interest rates are lower, currently. However, this is not an indication of lower payments. In fact, with the option-arms loans, payments may very well go up even with a lower rate, since the loans will be recast with all the additional unpaid interest tacked on as principle. So, a lower rate v. more principle to determine the payment...you do not know who wins out.

Further, rates for at least some loans (maybe a lot/most) will not adjust that much lower, as they were financed at already-artificially-low "teaser" rates.

Moreover, there is a murmur amongst the Fed presidents that they may increase rates despite unemployment being high (See Atlanta's Lockhart's statements). In fact, he mentioned that "Going forward I intend to include asset price movements as one of the things to be watched [when determining whether or not to push for an increase in rates]." If you theory is true, stabilizing prices (and eventually rising prices), this would likely put the Fed under some pressure to engage a tightening policy. So, I do not think it wise to bet that rates will remain low through the period when J-dub claims the majority of Alt-A and Option-arms will reset.


On Nov 12 09:17 AM The Good News Economist wrote:

> <img class="authors_reply" src="static.seekingalpha.co...">
>
>
>
> @Thomas,

Nov 12 10:32 AM

[po folks:]

Please help me understand something about alt-A's: Are they originated at a below market interest rate, that has to be increased when reset, or, are they reset according to prevailing interest rates (US prime, LIBOR, etc...)?

Nov 12 10:33 AM

[moneyagent:]

I believe your right the foreclosure market is getting better everyday if you live on mars. What meds are you taking and why don't you share? Although some what amusing your article could not be further from the truth. Another political view polished to shine light in the shallow eyes of the public. Get motivated and read the numbers again. I am sure you'll get right next time.

Nov 12 03:05 PM

[bobbybutte:]

Will the Obama adminstration provide tax credits for those who provide a job abd health insurance for 5 years instead of extending unemployment benefits?

Nov 12 03:19 PM

[j-dub:]

If the fed funds rate is kept this low 12 months from now, we will either be in a middle of a full on depression or the inflation boogy man will be breaking out of the closet.
Neither will be good for the housing industry.
There are NO good answers.


On Nov 12 10:32 AM AJMB wrote:

> This is very true that interest rates are lower, currently. However,
> this is not an indication of lower payments. In fact, with the option-arms
> loans, payments may very well go up even with a lower rate, since
> the loans will be recast with all the additional unpaid interest
> tacked on as principle. So, a lower rate v. more principle to determine
> the payment...you do not know who wins out.
>
> Further, rates for at least some loans (maybe a lot/most) will not
> adjust that much lower, as they were financed at already-artificially-low
> "teaser" rates.
>
> Moreover, there is a murmur amongst the Fed presidents that they
> may increase rates despite unemployment being high (See Atlanta's
> Lockhart's statements). In fact, he mentioned that "Going forward
> I intend to include asset price movements as one of the things to
> be watched [when determining whether or not to push for an increase
> in rates]." If you theory is true, stabilizing prices (and eventually
> rising prices), this would likely put the Fed under some pressure
> to engage a tightening policy. So, I do not think it wise to bet
> that rates will remain low through the period when J-dub claims the
> majority of Alt-A and Option-arms will reset.

Nov 12 08:35 PM