Foreclosure Recap – Week #28
Not only are homeowners feeling the crunch of the foreclosure market and the poor real estate market and over economy big business is feeling the crunch with foreclosure rates that are three times as high this year as they were last year. And about half of that increase has been in just the second quarter of this year which is not boding well for the upcoming real estate year, at least not on the commercial segment of the world. Nationwide retail space seems to be the hardest hit and the most affected with over 31 billion dollars worth of property in some form of distress. The article tells a sad tale and from the looks of what is there things look to get worse before they improve here. It is all a trickle down effect of the job loss and housing market.
Reuters brings a very unusual story of how lately the American family has been moving out of their homes and trading that living space for hotels. Some families are using it as they transition from the foreclosed home into an apartment, some are using it as temporary housing as they try to put their lives together after foreclosures and some are just getting by day by day and week by week and are cramming entire families into one bedroom apartments and doing whatever they can in order to survive. It is happening on the east coast to the west coast and almost everywhere in between. It seems like the one facet of the country that might be doing better in this crisis might be the motel and hotel industry as people clamber for places to keep families safe.
This New York Times story claims that a good many people that are eligible for assistance with the federal programs are not taking advantage of them. The reports show that about 80 percent of homeowners are in the category of being eligible for this help. This is partly due to people not being educated as to what they are eligible for and partly because the states are doing what they can to help as well and many people seem more comfortable with state help than asking for it from the federal level. The article raises a lot of very interesting questions that all basically ask why.
Another interesting story of how grand ideas and plans have come to quick halts. As money ran out a construction project which was designed to build phenomenal skyscrapers and high rent buildings out of what was once a working class neighborhood and was them turned into a theme park and finally set by developers to become some world class condos for the elite now sit partially done and littering the skyline with buildings and other parts of the project partially done and yet far from completion. It shows how quickly the landscape can change and how once expected to look grand it is left as almost an eyesore. You can find the story in it’s entirety here:
Many thought that a freeze on property foreclosures might be a good answer towards stemming off the crisis that was facing homeowners. A lot of places actually tried various variations of this plan to stimulate the local economies and they have failed. The numbers are interesting. It seems that of the companies that initiated the freeze to help people, 93 percent of those properties continued on into the full foreclosure as compared to companies that continued with foreclosure business as usual who saw 89 percent of those properties fall into full foreclosure over the same period of time. It appears that what has happened is that the freeze actually got the consumers farther in the hole due to mounting arrearages and such.
The city of Tampa in Florida is doing what it can and is offering foreclosure help to the people in that area. The city is actually helping the home owners renegotiate the mortgage terms with the lenders so they won’t lose their homes. In a nice gesture they are trying to figure out, based on bills and income, what the families can afford to pay and they are trying to make that happen for them. They are even going a step beyond and in the event that the family home can’t be saved they do what they can to get them into a rental that can accommodate them.
Just when we thought that perhaps things were starting to look a little better for the country in the foreclosure arena we get this information. Phoenix, Los Angeles and Miami all experienced a pre-foreclosure spike in the month of June. In an effort to try and soften that news the same article also states that even though there has been a spike increase between May and June of this year that the overall numbers for the year appear to be falling and they claim that is a good indicator.
The Chicago Tribune ran a story on the state of Illinois targeting mortgage fraud in the state. The attorney General there filed suits against four companies that are violating the states mortgage rescue fraud act and they are going after them to the full extent that the law allows. It appears that the companies named in the article took upfront fees from mortgage holders and promised to help assist them in negotiations with the foreclosing lenders and then never delivered on that promise.
From the Associated Press we find this story about Treasury Secretary Henry Paulson who defended a lot of ideas from the former administration and claims how much worse we would be today had the Bush administration done things differently. I am sure that everyone reading the article will have a strong opinion one way or the other on the many varied comments in the article. It is well worth the time to read although I caution you that it might insight you to either elation or anger. There is not going to be a lot of middle ground for your emotions after reading the article.
Finally this week from the New York Times comes this article. They claim that one in every 84 housing units have received at least one foreclosure filing. So that means if you live in a town of 8,400 houses at least 100 of them have received a foreclosure filing. Altogether, that makes for a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — reported on 1,528,364 American properties in the first six months of 2009. Compared to the same period last year, the number of total foreclosed properties rose nearly 15 percent. That should be enough to make you feel good if you have been lucky so far or give you some solace if you have not.
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