What's scary is this does not include people renting homes or apartments.

Many more are losing their homes.

Visit the above for a possible free market solution to the current Mortgage Foreclosure problem that minimizes and possibly eliminates real losses for all concerned.

That's true Chris. The numbers don't take into account the actual number of people being displaced by foreclosure, be they owners or renters. And that would be a very scary number indeed considering the state of the nation's economy today when accounting for job losses, high energy and food prices, and everything else.

People always look at the negative...It's finally a great time to buy and invest.  There will be more people that can afford to buy a house now, since prices were going too high too fast.  Prices are at the 2004 level and we won't see it drop much further.  Prices are dropping to rent levels.  Why rent, when you can buy!

I don't follow. How does this report not include people renting homes? People renting can have financial problems, and they can stop paying rent, but they can't have foreclosures because they don't have mortgags.

Whether a person lives in the house or not, if they get a foreclosure notice, it is still a foreclosure notice.

The bottom may not be in sight in some markets just yet. Although rents are now in line with mortgage payments, there still is not a balance of buyers and sellers out there.  With the pressures of more and more foreclosures coming on the market and the market being saturated with unsold homes, there will only be downward pressure for prices — especially in parts of the country where it boomed most. Furthermore, financing is not as easy to obtain as back in 2004, making it difficult for more people to get into a home even though rents are higher than mortgage prices respectively. Although it is a more opportune to buy, price drops will resume.

 

Doug

The worse is yet to come. As the market is absorbing the last wave of subprime foreclosure, another bigger wave of possible foreclosure triggered by Option ARM is preparing to take off.
       Option ARM loan or so called balloon loan does not reset in two years. They reset after three years or after. Many of these borrowers are categorized as Alt A. They are just as toxic as sub prime or even worse because borrowers can state their income and lenders take it without further question. These borrowers do not have documents to support their income because they are either self employed or contractors. It is not hard to imagine what will happen when the interest rate increases and unemployment shoot the high level. These Alt A borrowers will be in the same boat as subprime and they face worse consequences because many of them may qualify for higher loan amount in their loan. When they default, bank losses will shoot to the sky — and many homes will be foreclosed.

I don't know when is the best time to buy, but this is something at the horizon and many agencies see it coming. Homebuyers will have to make a decision if they are willing to take the chance.

That’s my 0.2 cents.  

 

Responsible Homeowner

Hope the new legislation will bring down the numbers for this month.

Marina

The new legislation wont bring down the numbers. Along with the option arms homeowners are faced with growing negative equity. One option is the FHA Secure Short Refinance for a portion.  The best choice is to do a workout with their current lender if that is a possibility.

Paul Dunn

Paul,

Thanks for the comment. Is the short refinance option something that is enabled by the new housing bill that became law recently. Or was that available before? Are you seeing lenders being will to agree to a short refinance?

I live in the 85255 zip (N. Scottsdale, AZ). The bubble took longer to pop here as many people were able to keep their heads above water longer, but now things are really starting to crash. Lots of investors and speculators bought here, resulting in massive increases in value in 2004 and 2005. Now, virtually nothing in the $350,000 to $600,000 range is selling. Foreclosures and short sales are flooding the market, accelerating the declines. There are approx. 150 foreclosures for sale in this zip and hundreds more in preforeclosure. Many sellers are in denial and are still expecting to fetch near bubble level prices for their homes. All this will accomplish is ensuring that they will ride the market all the way to the bottom, where ever that may be.

People I feel don't know or want to know the half of it.  This is tied to more than foreclosures, and housing prices.  There are four things in play, and we are seeing them play out.  1. trade with slave labor markets which has been happening, and moving of industry to China, expansion to China, India and Mexico of high paid industrial jobs.  Without future good paying jobs and industrial production we are all going to see income level declines, job losses, and downward depressions.  Ripple effect from that.  2. Competition which keeps this happening due to open borders and high priced trades to be made, world expansion of population and limited oil and energy resources.  Energy slams everything and causes everything to go up, budgets to buckle.  This tied to peak supply of oil and delivery methods or sheer greed and conspiracy to keep energy off the market, puts downward pressure on U.S. GNP.  3. Loss of GNP and spending to keep everything going.  Oil prices causing Big Three to perhaps collapse, and ripple effects in economy of Michigan alone could crash the entire U.S. banking system.  Energy prices without a replacement, best replacements are Natural gas from Alaska, takes time and is still a fossil fuel or Nuclear fusion breeder reactors, which are the only renewable fuels that can keep civilization going.  4. People in denial, in either case, the foreclosure and housing bubble based on hype and future growth and promises were a lie to begin with, and as fundamentals ,especially energy, start to push the entire economy down, the banking industry and other "macro-economic" traders are doomed with nobody able to stop the slide of civilization.  We'll see depressions and recessions, multiple.  What you're seeing now is just the tip of the iceberg, get ready for a string of 1930 like depressions and people looking to "take advantage" of a "good deal", but economy fundamentals have been destroyed by nature and consumption of resources.  Tied to over simplification and railing against small issues like "real estate bubbles", or bad government planning and putting tax money into wars instead of medical health care, etc.  All these are smoke and mirrors and as peak oil or it's equivalent rips into the world economy, this is just the tip of the iceberg.  Eventually we may see everyone who has a debt on their house loose it and starvation to be held at bay by soup kitchens.   That's where resources or the "lack of basic" energy resources are taking us to.  The Real Estate problem is just a piece of the overall decline of high BTU lifestyle and 4 billion extra mouths to feed in the world.

We had to file for bankruptcy in June 2007, and discharge our mortgages also.  At the time we filed it was common knowledge we could get a subprime mortgage and had been looking at lower priced homes in our range.  By the time our discharge came and end of October, the Poop had hit the fan market wide and subprimes were being eliminated, especially now for someone with a Chapter 7 - which included a foreclosure pending.
During our filing we accidentally got pregnant (using birthcontrol) and were having our 5th child. [she came out beautifully in may].  but now as a family of 7, we aren't even allowed to be in apartments, with the glut of people looking for rentals prices have shot up out of our range for a larger home, and there are so many applying for rentals, we've been turned down everytime.
We finally found an apartment complex that didn't count our new baby till age 1.
But in 9 months we need to be out again when officially become 7 to them.
We fully qualified for the chapter 7 under the Bush bankruptcy bill, we followed all the rules and did what we had to do to get out from under the punishing debt we accumulated from the years 2001-2007 according to the feds.
But we didn't comprehend fully the results that there is no federally designed way for us to recover with housing.
Apparently they lead you to water but then leave you in a riptide.  We are subject to market forces beyond our control and policies that are against anyone with less than a 700 credit rating, and no serious blemishes for 3 yrs.

Usually people want to know how others get into debt.
I'll tell ya - in 2001, the economy began to slide, the job abundance from the 90s wore off, gas started to climb, and by 2002, deregulation of some utilities allowed previously cheap natural gas and electric to skyrocket.  At the same time, auto and home owners insurance with Allstate literally doubled for no reason.  I asked and they just said everyones did.
It did so without my knowledge and i had to pay it until i could find new cheaper insurance which i did.
At the same time, my property taxes began to skyrocket aswell.  From 2000 when i bought my small home to 2002, mine went up 90%.
During this 2.5 yr period my income only rose modestly for merit increases. From a modest wage. 32k +~3%/yr.
Thats not including the HVAC bills from this new house that were 6 in 2 years (2002-2004) totaling 1500.  3 transmissions in the same stupid dodge caravan in 3 yrs (just after warrenties) misc multiple car repairs and problems averaging about $2000/yr. Then I married my sweetheart in 2003 for a total of $2000 cost for the whole wedding. no honeymoon.  And from 2003-2005 spent total of $6000 in court custody bills for her first two kids (we won - father is evil so we kinda had to fight for the kids and us).
I liquidated all my retirement funds i had accumulated, and took a loan on my new 401k, still ended up trying to use Home Equity loans to fix things at least temporarily.... (125% loans - had 3 mortgages on same house).
Gas kept going up the whole time, food went up, we never once shopped anywhere but discount stores, yard sales, and charity stores for our stuff.  Had no new furniture no fancy cars, no playthings, no eating out hardly at all (although a $5 pizza is cheaper than groceries) no wealthy family to help, all our friends going through similiar pain, roof leaks, cracked foundations, attic mold, falling apart kitchen bath, etc, - we never missed a payment on anything until we filed our chapter 7 after discussing with greenpath and attorney.

Everything else sucks when you average $500/month in gasoline commuting to work, going to school and church and stores.
Now we're clear of debts but student loans, but cost of living is so high now, and rent is higher than my original mortgage payment, that we aren't sure we can save up significant money to get a house in 2 more years when FHA would allow us to get one.
After bankruptcy, i immediately cleaned up my credit reports, i fought with one credit union and had the state of michigan on my side as they purposely tried to fraud my credit report adding double black marks and refusing to report the chapter 7 by law correctly.
I obtained a new credit union membership, got a secured visa, got another visa both small limits, use them per the instructions to rebuild credit ratings.  Got a low interest auto loan by personally talking to my bank manager, to replace wifes' minivan that was leaking everything, rusting apart, no A/C, electrical problems and leaking exhaust right into the cabin when windows open.  
So i got her a newer used minivan and she is a happy honey for it. We had horrendous problems, financial hardship, new baby born, and had to move in a short time frame, from a 3 bedroom house/garage to an apartment in same year.
and we didn't divorce.  I'd say that was pretty good.

Also, both have had health issues, hers kept her out of work for a few years before last 3 kids were born, mine are all stress related except carpal tunnel both arms.

I now make just a touch too much (with my 2nd part time job) to get any assistance other than WIC, just a hair too much to qualify for govt programs, and no one cares that I had a 17 year history of paying my bills ontime until we filed the legal federal way to releive ourselves of too much debt, when it comes to getting a mortgage or HUD program, or usda rural agri mortgage, or anything else i've checked to find financing to get a home.

Oddly corporations that are run into the ground routinely get bankruptcy protection, and come out fully able to get lending at anytime.  Including failed banks and financial companies, and ones committing crimes.
Yet a consumer is punished 10x that for a decade when every freakin card is stacked against consumers and in favor of corporations. (at least under this administration)

My  family and I are looking to buy a bank-own home or a short sale property.