Thursday, January 29, 2009
That chart only looks good if you work at NASA.......
From the LA Times
More than 236,000 homes were lost to foreclosure in California last year, topping the previous nine years combined, data released Tuesday show. And the number of borrowers who defaulted on their payments hit a record high of more than 404,000. (and that number would have been quite a bit higher had AB1137 not slowed the foreclosures in the 4th quarter!)
The wave of foreclosures, which began in early 2007, was initially triggered by falling home values and resets on adjustable-rate loans. But lenders and industry analysts say the trend is now being exacerbated by rising unemployment, which has shot up to 9.3% in California.
California was last hit by massive foreclosures in the early 1990s, when the state was also struggling with an economic downturn and rising unemployment. At that time, there were about 10 foreclosures for every 100 layoffs, said John Burns, an Irvine real estate consultant.
In this cycle, he said, there will be about 15 for every 100.
"The price declines have been more severe this time, and the job losses are looking worse," Burns said. "Consumers are more likely to give the keys back to the bank because they don't have anywhere to turn."
In California, the number of homes lost to foreclosure rose 180% last year compared with 2007, according to MDA DataQuick, a real estate data firm. It was the largest number of foreclosures since DataQuick began tracking them in 1988.
The number of foreclosures actually dropped this fall, to about 14,000 in November from about 25,000 in September. But that decline was probably a temporary blip due to a new state law that forced lenders to make more efforts to contact borrowers before foreclosing, and doesn't signal a reversal of the trend, said DataQuick analyst Andrew LePage.
Indeed, foreclosures rose 14% in December from November. And notices of default, the first step in the foreclosure process, also dropped this fall but had rebounded sharply by December.
The word on the streets is that there's a BIG foreclosure wave-a-coming. I've read it in the nation media, I've heard it from friends in the banking industry and the real estate industry and Mr. Mortgage has just put a good post on the subject. AB1137 backed up the system, in addition many banks held off over the holidays, and they were already backed up before AB1137. I know from personal observations that there are truck-loads of empty homes that are not listed.
In addition to the current crop of foreclosures resulting from the bubble popping, the foreclosure crisis is now sprouting in a new area. Mounting job losses are causing another wave of lost homes. People that bought well before the bubble and were previously in good shape are losing homes from job losses ( A friend of mine in San Diego may lose his house of 10 years after getting laid off in Nov). Unemployment in Ca is getting very close to the levels of the early 90s. The national numbers, while better than Ca are the worst they've been in decades.
I'm really hoping this wave of REO's hit's soon. X and the family are ready to move on. Plus if I don't buy a house I will probably destroy my liver taking cruises........