New round of foreclosures threatens housing market

[The Northerner]

The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can't obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

"Some of the positive housing data may not be signaling a true turning point, as many servicers are holding back on foreclosures and the related houses are not yet being offered for sale," said Diane Westerback, a managing director at Standard & Poor's. Westerback said it could take 33 months to clear the backlog.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/03/11/AR2010031104866.html?nav=igoogle

[Dappleganger]

1. I know there are more people at risk in my neighborhood.

There are two neighbors who told me that they are teetering on the verge of foreclosure. Both took out home equity mortgages to do things to their house (and probably more) about three years ago and both houses have experienced severe losses of income. My guess is that there are many, many more in this area who did the same.

[Igel]

2. Two houses on my block up going.

One's up for sale; I suspect the owners are in trouble and are trying to bail to avoid the inevitable.

The people on the corner moved out Monday, spray-painting their garage door with a snarky comment. The repo crew came in on Tuesday. I hope it goes on the market soon.

I have to wonder about some of the others. There's a gaggle of unemployed men that meet just about daily to BBQ hot dogs and burgers and swill beer. Their number was reduced by one on Monday.

Houses here appreciated 20% or so from '05 (when the development went in) until '08, when the foreclosures began. They're 20% or so below their '05 prices now. We bought in summer '09.

[Greyhound]

3. Add the inventory that the banks are keeping in limbo to keep a facade of solvency

and you start to get a glimpse of the scale of this disaster. The solution is simple, but impossible for the moneyed parasites, so it won't happen. Two huge forces, economic reality and unprecedented concentration of wealth, pulling in opposite directions.

They're just shining us on while boat goes over the falls. Nobody has a clue if it will survive or where to go afterward, we're Lewis & Clark without Sacajawea.