U.S. Home Seizures Reach Record in Sign Recovery Is Delayed

[marmar]

U.S. Home Seizures Reach Record in Sign Recovery Is Delayed
By Dan Levy


May 13 (Bloomberg) -- U.S. home repossessions rose to a record level in April while foreclosure filings dropped in a sign mortgage lenders are working off a backlog of seized properties, according to RealtyTrac Inc. data.

“Right now it appears that the banks are focusing on processing the loans already in foreclosure, and slowing down the initiation of new foreclosure proceedings as a way of managing inventory levels,” Rick Sharga, RealtyTrac’s executive vice president, said in an e-mail. “We’ll probably see this trend continue for a while.”

A record 92,432 bank repossessions were reported in April, up 45 percent from a year earlier and 1 percent from March, Irvine, California-based RealtyTrac said today in a statement. Foreclosure filings, including default and auction notices, were 333,837. One out of every 387 U.S. households got a filing.

Unemployment of 9.9 percent and a rising percentage of U.S. homes worth less than the mortgages on them are combining to thwart a housing recovery, according to RealtyTrac. About 5 million delinquent loans will probably end up in the foreclosure process in addition to the 1.2 million homes already taken back by lenders, Sharga said.

Foreclosure filings fell 2 percent from a year earlier, the first decline since the company began issuing annual reports in January 2006.

Defaults may not peak until 2011 depending on how lenders process them, Sharga said.

“The underlying conditions -- mostly unemployment and millions of ‘underwater’ loans -- haven’t improved,” he said. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=ajBu2ra7o.nQ&pos=7

[AndyA]

1. Isn't it rich?

The same financial institutions that are responsible for this mess are now taking people's homes away from them. Those same people would likely have jobs and be current on their mortgages if the financial sector had operated prudently and responsibly, avoiding this disaster.

As punishment, these firms should be prohibited from processing any foreclosures. They are, after all, responsible in many cases for the homeowner not being able to pay the mortgage payment.

Perhaps consumers should start suing the banks for their irresponsible behavior.

[ixion]

2. Yep, they're taking homes from them, after those same people bailed them out

and saved their sorry a**.

:argh:

[proudohioan]

3. Yeah, no doubt! n/t

[SoCalDem]

4. Nothing has really changed

Banks were allowed to KEEP the mortgages, even though they got bailed out.. What did people think would happen?

There was a moratorium on the actual foreclosures for some months, but the people living in the homes they could not afford, were still upside down with no hope of selling for what they owed, and were unable to make the payments..

Did anyone think that the banks would really re-negotiate the mortgage principle downward?..or that they would just forgive & forget the unpaid/up-payable mortgage?

Once a person misses a few payments, it's game-over for most of them. The penalties and late fees start mounting, and most of the time, the banks won;t even accept partial payments.

A shitload of foreclosed homes only depresses the market more, and creates a vortex of falling values.

We can "thank" Greenspan for keeping interest rates ridiculously low for too long, and since it was the only thing holding the boom together, it was only a matter of time until the implosion .

Housing & interest used to do a little dance.. high rates/low prices..low rates/high prices..but there was an equilibrium when banks had standards for loan qualifications.

Once banks decided to throw caution to the wind, and loan to anyone with a pulse, there was no hope for the future of home sales/home building. It had to eventually wind down..and now we are "there".

[KharmaTrain]

7. They Also Have To Capitalize Those Mortgages Now...

In the "good old days" of the bubble the livin' was easy, write the mortgages, sell 'em, hedge 'em and watch the property values artificially increase. There was no real money earned, it was all on paper...lots and lots of paper. When the bottom fell out, the paper was worthless and the banks either had to find real money or go under (and we're seeing many who have). They're doing this by squeezing every way they can. Higher "user fees", raising interest rates and keeping credit tight...coming up with cold hard cash...including whatever bail out money they were able to nut away.

The Catch 22 as you point out is the "vortex" that foreclosing on more properties only decreases property values that makes it hard for them to recoup in real money the paper money they once claimed to have. In some areas the real estate market has recovered or stopped from stagnating as bargain hunters and first time buyers have picked up bargains, but that's not helping those on the other end...still underwater with mortgages on properties that are now worth half of what they paid for them. I've read that without some kind of federal intervention to either forgive loans or force banks to renegotiate, forclosures will continue until 2013...with commercial foreclosures going on for years beyond that. That's like depression era figures.

Yep, we are "there" and will be for quite some time. For the millions who got caught behind the foreclosure 8-ball there are a many, many more who bought high and still stuck with mortgage payments higher than the property they live in...who've lost equity and hanging on as best they can.

Cheers...

[AllentownJake]

5. Don't worry Tim Geithner and the Obama economic team have a plan...

What? They are doing that re-modification thing again that was a giant expensive bureaucratic failure....fucking panic.

[Scuba]

6. Sieze BP, sieze Goldman Sachs, don't stop until the crooks are behind bars ...

... America will NEVER get even for the Gulf Gusher (Cheney's Chernobyl).