The truth about foreclosure filings
Foreclosure filings are up form November of 2006 to November of 2007. That’s not a surprise to anyone since the major news media broadcasts daily how bad the real estate market is and appears anxiously waiting for it to get worse. Last month there were 200,000 foreclosure filings across the country and 40,000 filings in California reported by Realty Trac Inc.
Home foreclosures are getting more ink (press) than the war on terror. Congress has been obsessed with drafting new lending legislation, the Federal Reserve is adjusting the nterest rates, builders and lenders are closing their doors, filing bankruptcy and laying off thousands of employees. Potential homebuyers are so frightened by the current housing market that sales have dropped 40 percent and prices continue to fall. It’s a national crises or is it?
The Sacramento Bee’s headlines “Foreclosure filings up 68% over last year” are enough to stop anyone from considering buying a home but reading between the lines provides a different perspective.
When is a “Foreclosure filing” not a foreclosure? When Realty Trac reports it. Realty Trac’s numbers are exaggerated. In addition to actual foreclosure filings they include default filings, (most defaults never end in an actual foreclosure) auction sale notices and bank repositions. When Realty Trac includes auction sale notices and bank repositions the numbers have been counted more than once.
What most readers don’t understand is that many over financed troubled homes will have a first and second mortgage, requiring two notices of default. If the homeowner doesn’t bring the mortgage payments current, the lender will file an auction sale notice and then if the lender takes position of the property, a bank reposition is recorded. So up to four recorded documents could be filed on one defaulting property. More accurate number could be found on the number of actual foreclosures not on the “foreclosure filings.”
Any foreclosure or foreclosure filing is too many but there are signs that the worst may be over. November filings were actually 10 percent less than October. In California default filing fell by 21 percent from October. This is the second time filings have decreased since September when they fell 8 percent.
Don’t be too surprised if you don’t hear or read about monthly foreclosure filings down 10 percent and 21 percent in California. The real estate market has taken a beating over the past two years but it’s not as bad Realty Trac and the major news media makes it out to be.
Home foreclosures are getting more ink (press) than the war on terror. Congress has been obsessed with drafting new lending legislation, the Federal Reserve is adjusting the nterest rates, builders and lenders are closing their doors, filing bankruptcy and laying off thousands of employees. Potential homebuyers are so frightened by the current housing market that sales have dropped 40 percent and prices continue to fall. It’s a national crises or is it?
The Sacramento Bee’s headlines “Foreclosure filings up 68% over last year” are enough to stop anyone from considering buying a home but reading between the lines provides a different perspective.
When is a “Foreclosure filing” not a foreclosure? When Realty Trac reports it. Realty Trac’s numbers are exaggerated. In addition to actual foreclosure filings they include default filings, (most defaults never end in an actual foreclosure) auction sale notices and bank repositions. When Realty Trac includes auction sale notices and bank repositions the numbers have been counted more than once.
What most readers don’t understand is that many over financed troubled homes will have a first and second mortgage, requiring two notices of default. If the homeowner doesn’t bring the mortgage payments current, the lender will file an auction sale notice and then if the lender takes position of the property, a bank reposition is recorded. So up to four recorded documents could be filed on one defaulting property. More accurate number could be found on the number of actual foreclosures not on the “foreclosure filings.”
Any foreclosure or foreclosure filing is too many but there are signs that the worst may be over. November filings were actually 10 percent less than October. In California default filing fell by 21 percent from October. This is the second time filings have decreased since September when they fell 8 percent.
Don’t be too surprised if you don’t hear or read about monthly foreclosure filings down 10 percent and 21 percent in California. The real estate market has taken a beating over the past two years but it’s not as bad Realty Trac and the major news media makes it out to be.
posted by Ken Calhoon at 8:47 AM
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