Regular readers will not be surprised by this news. Is it over? Not by a long shot…
From RealtyTrac:
IRVINE, Calif. – July 16, 2009 – RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.
“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”
Now, part of the surge is the floodgates being opened by to foreclosure moratoriums being lifted by Wells Fargo (WFC), JP Morgan (JPM), Bank of America (BAC) and Citi (C). The simple truth is those actions only delayed and did not prevent the inevitable action.
We know unemployment will continue to rise in the coming months, significantly. For that reason alone we will see increased foreclosure activity. Add to this the coming option-ARM reset and we have many more foreclosures in the future……many more.
The silver lining is for those looking to buy a property or a vacation place, prices are going to continue to become more attractive.
Disclosure (“none” means no position):Long WFC, none