Archive for the 'Foreclosure Rates' Category

As the number of notices of default increased in the Bay Area and in other areas in California, housing analysts are not so sure about how the government foreclosures program can solve the foreclosure crisis in the state.

Based on data from San Diego-based MDA DataQuick, notices of default across California increased in the first quarter by 19 percent to 135,421 and increased in the Bay Area by 17.6 percent to 19,438, compared to figures in last year’s first quarter.

According to real estate analysts, among the reasons for the significant increases were delays in filing by lenders due to government foreclosures schemes. In September last year, the state government created a law requiring mortgage lenders to implement more steps before issuing foreclosure notices. Additionally, in the last months of 2008 and first months of 2009, many mortgage banks, including Fannie Mae and Freddie Mac imposed foreclosure moratoriums. These delayed the issuance of notices of default, which surfaced in the first quarter surveys by MDA DataQuick, RealtyTrac and other foreclosure tracking firms.

In RealtyTrac’s report for the first quarter, California foreclosures reached a total of 230,915 and a foreclosure rate of 1 unit in every 58 housing units, making California third in the firm’s ranking of states based on foreclosure rates. The total foreclosure filings included 60,256 notices of trustee sale; 124,875 notices of defaults and 45,784 real estate owned private lender and government foreclosures.

Based on MDA DataQuick’s research, 43,620 houses were repossessed by mortgage lenders in the first quarter. The Bay Area had 6,050 housing units repossessed.

The main question among some housing analysts and advocates is how the government foreclosures program can solve these rising numbers of notices of defaults and foreclosures.

Alan White, a professor at Indiana’s Valparaiso University, has been studying loan modifications and has found that the government foreclosures program will surely help, but it has limits and would not be able to help homeowners with significant negative equities.

White said that over 20 percent of all mortgage loans have become underwater loans – with loan amounts much higher than the value of the homes financed.

He also said that second mortgages, which comprise a significant portion of mortgages in bank foreclosures, are not covered by the government foreclosures program. Mortgage servicers, including Mark Hanson of Field Check Group, said that only about 10 to 15 percent of homeowners in foreclosure are qualified under the government foreclosures program.

Last month, about 80,775 homes were added on tax foreclosure property listings in California, a 5 percent increase from January and a 51 percent jump from a year ago. Tax foreclosure property listings auctions rose to almost 179 percent in the state.

According to data, six of every 10 houses in tax foreclosure property listings are bank-owned homes and this trend has created great buying opportunities for California homebuyers.

However, some Northern California homebuyers are complaining against the practice of banks requiring them to open escrow in Southern California before they would sell houses included in tax foreclosure property listings.

Brad L’engle, a loan consultant, said that banks are taking advantage of potential homebuyers’ interest to purchase homes in tax foreclosure property listings.

He explained that homebuyers pay double the amount of fees on Southern California title companies and escrow than what companies in Northern California would charge. These unnecessary fees include loan tie-in, sub escrow, notary and e-doc fees, according to L’engle.

He added that banks forced homebuyers to pay these fees if they want to buy foreclosed properties.
Banks requiring potential homebuyers to open escrow in Southern California may be violating the Real Estate Settlement Procedures Act (RESPA). The law prohibits any seller of properties to require buyers to acquire title insurance policies from a particular company.

Brokers claimed that most sellers of foreclosed homes are violating this law.

The California Housing and Urban Development has started investigating the issue following complaints from homeowners.

For the meantime, those who are interested in purchasing houses owned by banks should be aware that they do not have the option as they are entitled to under RESPA.

In line with this, California assemblywoman Cathleen Galgiani sponsored the measure, Buyer’s Choice Act last month to protect buyers of distressed properties.

The proposed law would prohibit owners of foreclosed properties, such as banks and mortgage lenders, from making it mandatory for potential homebuyers to use a particular escrow and title firm.

RealtyTrac’s monitoring of tax foreclosure property listings nationwide showed that six cities in California are among the 10 highest in foreclosure rates: One out of 67 houses in Stockton, one out of 68 in Modesto, one in 74 in Merced, one out of 80 in Riverside-San Bernardino, one out of 85 in Bakersfield and one in 111 in Vallejo-Fairfield.

Related Information:

• Florida Foreclosures

Florida foreclosures accounted for around 17 percent of the country’s 2,330,483 foreclosure filings in 2008, according to California-based foreclosure tracking firm RealtyTrac. There were around 385,309 Florida foreclosures last year, an increase of 412 percent from 2006 and a 133 percent increase from 2007. In December 2008, there were 50,808 Florida foreclosures, a 3 percent increase from November 2008 and an increase of 63 percent from December 2007.

Florida foreclosures ranked second only to California in 2008 mostly due to the state’s unemployment rate which is much higher than the national average, according to RealtyTrac’s chief executive officer James Saccacio. The state’s jobless rate increased by 3.5 percent in 2009, compounding problems arising from low home prices and soaring number of foreclosed properties.

At the top of the country’s ranking of states with the highest foreclosure filings is California, which had 523,624 filings. The third is Arizona, which had 116,911 filings. Ohio and Michigan are fourth and fifth, with 113,570 and 106,058 foreclosure filings, respectively.

In Florida, the county with the highest foreclosures rate in 2008 is Lee County, with around 12 percent of its residential properties receiving a foreclosure filing. The second and third counties with the highest foreclosure rates are Osceola County and Saint Lucie County, with 9.58 and 8.57 percent of their housing units receiving a foreclosure filing, respectively.

Of the total Florida foreclosures last year, Miami-Dade County accounted for the highest share, with 49,697 foreclosed units. The second is Broward County, with 47,387 filings. Lee County and Orange County is third and fourth, with 41,040 and 25,524 foreclosure filings, respectively. Fifth in the listing is Hillsborough County, with 24,165 foreclosure filings.

Among metropolitan areas in the U.S. with the highest foreclosure rates, Fort Lauderdale is sixth in the ranking, with 5.95 percent of its residential units receiving a filing. Seventh is Orlando, with 5.48 percent receiving a filing and eighth is Miami, with 5.21 percent receiving a filing. The top metropolitan area in foreclosure rate is Stockton, California, with 9.46 percent of its residential units receiving a foreclosure filing.

According to Florida housing analysts, most of Florida foreclosures in areas such as Lee County arose from delinquent mortgages taken by speculators during the housing boom years.

The administration of President Barack Obama is considering using taxpayers’ money to lower monthly mortgage payments of homeowners who are in danger of losing their homes to foreclosures.

As one of the largest states in the United States but with the lowest population, Wyoming registered a low foreclosure rate while surrounding states vary in impact from foreclosures. Nearby states like Montana and South Dakota registered some of the lowest foreclosure rates in the country, while Colorado and Utah absorbed the brunt of the foreclosures crisis and was included in the top ten highest states.

In Michigan, particularly in Washtenaw County, home prices have dropped considerably low to levels not seen since the 1990s. This is due to the number of short sales and Michigan foreclosures flooding the market. Despite an 11 percent increase in homes and condos sales last October with 304 units sold, prices dropped 20 percent compared to last year, averaging at $184,324.

According to reports released by RealtyTrac, there was still a considerable number of foreclosure filings recorded for the month of August compared to the same period last year. Despite this, the growth rate is considerably slower than in the previous months. This is certainly good news especially for states hardest hit by the foreclosure crisis, for it could be a sign that the foreclosure problem has hit rock bottom.

In most cities, you will find the same scene – declining home prices in neighborhoods as a result of the many bank foreclosure properties. For many homeowners, it is only logical for the taxes on their homes to be reduced considering the falling property values. Unfortunately, local assessor’s offices do not consider this a valid reason.

Although experts are saying that buyers have the upper hand in the current housing market, you should still try to find ways to make the most of the opportunities being offered by properties such as foreclosure homes.

It is that time of the year again when values of real estate properties are assessed in order to determine the corresponding tax. But with the foreclosure crisis still affecting most cities, it is not surprising that Kansas City property assessments are also reflecting such unfortunate market conditions.

For the past year, local governments have become concerned about the effects of the growing inventory of foreclosure homes on their tax collection. As you know, tax imposed on assessment of real properties is based on its current market value.