November Foreclosures: Naughty or Nice?
RealtyTrac released its November foreclosure numbers today and they show foreclosure activity for the month decreased 7 percent from the previous month, down to the lowest level since June (although it was still up 28 percent from November 2007). At first glance this appears to indicate that all the attention to foreclosure prevention on the part of lenders, government entities and others recently may be helping to keep more homeowners from falling into foreclosure. But there are some ominous signs on the horizon that the decrease may simply be the calm before the storm.
“Delinquencies on loans not yet in the foreclosure process jumped to nearly 7 percent in the third quarter, a record high, according to the Mortgage Bankers Association,” said James J. Saccacio, chief executive officer at RealtyTrac. ”And more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the U.S. Office of Thrift Supervision. Many of these delinquencies could turn into foreclosures next year.”
View video of panel discussion at National Housing Forum on Dec. 8 with John M. Reich, Director, Office of Thrift Supervision, Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation, John C. Dugan, Comptroller, Office of the Comptroller of the Currency, Donald L. Kohn, Vice Chairman, Board of Governors of the Federal Reserve System, James B. Lockhart III, Director, Federal Housing Finance Agency.
Dugan talks about the "re-default" rate at about the 20-minute mark, saying that "over half of all mortgage modifications seem not to be working after just six months."
