Consumer Law

February and March Foreclosure Trends

By Alan White

By Alan White

The numbers are not good for foreclosure trends in February and March.  HOPE NOW's February data release shows a 12 % increase in foreclosure starts over January.  Declines in October and November in new foreclosure filings were followed by big increases in December, January and February, reflecting perhaps some temporary moratorium activity.  Similarly, completed foreclosure sales were up 25% from January to February, and back to their levels of last summer after a notable dip in November and December.  My own tabulations of subprime and alt-A investor reports (download here) confirm that the delinquent mortgage and foreclosure inventories continue to grow. 

Modification numbers were up in February (but down in March) as servicers continue to increase efforts to salvage delinquent mortgages.  Principal and interest forgiveness is being used a bit more frequently, up from 10% in November to 15% in March.  Modifications with payment reductions (as opposed to payment increase or no change) inched up from 50% to 55% between November and March.  Meanwhile, the loss severities on completed foreclosures continue to worsen, climbing form 56% to 64% in the same period.  In contrast, loans that were modified with some amount written off averaged a write-off of about 13% of the balance.

Full post as published by CL&P Blog on April 08, 2009 (boomark / email).