Housing Market Tracker - Foreclosure Data Review

Includes: CFC, FNMA
by: Judy Weil

Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market, housing stocks and the subprime crisis. Like all other topics and stock coverage from Seeking Alpha, you can have this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service.

Quote of the Day

"You've got to figure, these banks are in California, they've got a gazillion properties, they think on a national scale." - Joseph Petrocelli, owner of New England Property Solutions, a company that's hired by mortgage companies to handle the sale of foreclosed properties. Petrocelli was commenting on the phenomenon of lenders evicting reliable tenants when foreclosing on multi-family buildings, even when it often goes against the interests of the buyer, the neighborhood, and the lenders themselves. (Boston Globe, Dec. 17th)

Foreclosure Data

  • Hunger Woes 'Persistent'; U.S. Mayors See Rising Need For Food, Housing (Deseret Morning News, Dec. 18th) Utah: "U.S. Conference of Mayors report: Data from service providers in Salt Lake City and 22 other U.S. cities... show requests for food assistance over the past year increased by about 15%, and 19 cities expect demand to increase by that much again in the coming year... A mayors' conference spokesman called "the hunger crisis" the result of more people... underemployed or in job transition, [with] higher utility, transportation and housing costs... The recent spike in home foreclosures is playing a part... the report states. Sixteen cities report... 17% of all people in need and 15% of households with children are not receiving emergency food assistance."

  • Midwest States Lead Nation In Foreclosures, Delinquencies (North County Times, Dec. 17th): "Michigan and Ohio rank No. 1 and 2 on mortgage finance company Fannie Mae's list of states with the largest credit losses through Sept. 30. Fannie (FNM) listed losses ---- loans written off as having no chance of being recovered ---- of $185 million for Michigan and $101M for Ohio... By contrast, California saw $30M; Florida, $21M... Michigan had the nation's highest unemployment rate in October at 7.7%; Ohio's rate was 5.9%. Both are above the national rate of 4.7%... Nationwide data from Countrywide Financial Corp. (CFC) found the No. 1 reason its customers have been defaulting on mortgage loans is because their income was cut. That accounted for almost 60% of its loan defaults in the first 10 months of this year."

  • As Foreclosures Mount, Tenants Suffer (Boston Globe, Dec. 17th): "Foreclosed apartments increasingly are drawing interest from buyers who want to keep the current tenants, often to protect them and sometimes because reliable tenants are valuable. But mortgage companies say it is simply easier to sell an empty building, and more profitable to follow the same procedure in every case: Clear it, clean it, and sell it... Buyers [keeping tenants] could help to limit post-foreclosure evictions, a growing problem in Boston and other Massachusetts cities. Almost a third of Massachusetts foreclosures in 2007 involved multifamily buildings."

  • Colorado Restricts Mortgage Prepayment Penalties (Denver Business Journal, Dec. 17th): "Gov. Bill Ritter: Division of Real Estate Director Erin Toll has issued an emergency rule restricting prepayment penalties on mortgage loans. Toll issued the rule in response to concerns... that high prepayment penalties on mortgage loans will lead to an additional round of foreclosures as more adjustable-rate mortgages reset higher in coming months. The new rule prohibits prepayment penalties that extend past the adjustment date of an interest rate, teaser rate or payment rate. The rule creates a presumption that mortgage brokers have violated their duty of good faith to the borrower if they recommend a loan product with a prepayment penalty that extends beyond the adjustment date."

  • Number of Foreclosures Decreases in the Tri-Cities (KNDO TV, Dec. 17th) Washington: "High foreclosure levels might not be something to worry about in the Tri-Cities real estate market. Real estate agents say the number of foreclosures this year in Washington has actually gone down compared to previous years... Realtors say there are a lot of selling points in the Tri-Cities. "Recreation, the wine industry... excellent schools, and positive employment here... are definitely things that people are looking at," said George Eakin, a local realtor. Realtors also say sales were down during the month of November, but within the past couple weeks they have seen the number of interested buyers go back up."

  • County Foreclosure Rates Fall 23 Percent (McKinney Courier Gazette, Dec. 16th) Texas: "Collin County Clerk’s Office and RealtyTrac statistics: Collin County’s foreclosure rates fell 23% this year compared to 2006. This year, 5,353 properties went on the auction block compared to 7,003 last year. This year, October brought the highest number of foreclosure notes with 556. In 2006, January had the most foreclosure notices with 842. June brought the lowest with 362. June also had the lowest number last year... In December, Plano had 90 foreclosures while McKinney had 85. Allen had 45, while the town of Wylie had 44 notices. Frisco had 34."

  • Nonprofits Want Holiday Hold On Auctioning Occupied Foreclosures (Cleveland.com, Dec. 16th) Ohio: "Cuyahoga County: Nearly 20 nonprofit groups [proposed] Monday that the sheriff declare a "foreclosure holiday" and stop auctioning occupied homes for 60 days, starting Christmas Eve, [when] 300 homes will be on the block... followed by 250 others on New Year's Eve. Interrupting the county's march of foreclosures for two months would provide shelter for owners and renters through the depths of winter, said Bill Callahan, a Cleveland activist who helped draft the plan. It also would cut down on the number of abandoned homes and give owners time to take advantage of growing efforts to renegotiate loans."

  • Report: One-Fifth of Bay Area Foreclosures Were Investor-Owned (San Jose Mercury News, Dec. 16th): "San Francisco Chronicle: More than one-fifth of the San Francisco Bay area properties that fell into foreclosure this year belonged to real estate investors instead of overextended homeowners... One in six of the properties repossessed through September had been owned by people with two or more foreclosures in their names... The newspaper's analysis of more than 65-hundred repossessed homes and condominiums found both naive investors and perpetuators of fraud among those facing multiple foreclosures. Nearly 70% of the investor-owned housing was purchased without a down payment."

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