Consumer Law

Latest Foreclosure Numbers

By Alan White

By Alan White

New foreclosure filings declined a bit from about 200,000 in July to about 180,000 for September, according to HOPE NOW's latest data.  Completed foreclosure sales likewise leveled off at around 90,000 monthly.  While HOPE NOW reports a continuing increase in monthly modifications, to a high of 98,000 in September, servicers are still filing almost twice as many foreclosures as loan modifications.  HOPE NOW also is combining all forms of loan modifications in its numbers, including term extensions and recasting of arrears that result in higher monthly payments and mortgage balances.  Nevertheless, the significant increase in September mods is welcome news, and may reflect in part some of the FDIC's efforts with the IndyMac portfolio, and/or the implementation of the state attorneys general settlement with Countrywide/BankofAmerica.

Meanwhile, RealtyTrac is reporting a dip in foreclosure starts for September compared with August, running at a level of about 250,000 monthly (their sample and counting method are different than HOPE NOW's).  The credit for this, however, does not go to any Federal initiative, but to the states.  California saw a 50% drop in foreclosures from August to September, because of a new state law effective in September that requires lenders to contact homeowners 30 days before starting foreclosure.  Similar laws have also been implemented in New York and North Carolina, among others.  On the other hand, the various state initiatives provide only temporary relief, and numbers will probably climb again after the initial wave of foreclosure postponements passes.  The state measures can provide homeowners and servicers breathing room to negotiate more restructurings, but all evidence is that it will take far more than 30-day or even 90-day delays to insure that preventable foreclosures are prevented.

The number of seriously delinquent mortgages, meanwhile, is still growing, and stands at more than 2.2 million, not counting foreclosures in process, bankruptcies and REO.  The pipeline of future foreclosures continues to grow at the rate of 150,000 or more per month.

A final note - the HOPE NOW press releases include repayment plans in their total of foreclosures prevented.  Short term repayment plans are frequently not successful, and many homeowners have entered into more than one such plan, or have a repayment plan before they get a modification agreement, so in my view the grand total of "foreclosures prevented" reported by HOPE NOW is probably misleading.

Full post as published by CL&P Blog on October 29, 2008 (boomark / email).