The government imposed moratorium may have helped in the short term to lower REO inventory and allow 20% of eligible homeowners to modify their mortgages but the 600 pound gorilla is still in the room. As the moratorium comes to an end an unemployment still hovering around 10.5% there will be a second tsunami of foreclosures during the first and second quarters in 2010.

The news reports show increased delinquent mortgages are occurring all over the US and there is still a large number of homes that were foreclosed on that are still not listed for sale aka Ghosts or Shadow Inventory. There are several reasons for these assets to not be listed for sale but eventually those houses will either enter the real estate market and could further depress resale values. 

Below is an article from today's DS News to further illustrate the problem.

Even as home prices are beginning to show signs of stabilizing and the industry is ramping up efforts to keep troubled borrowers in their homes, the latest market study from Jacksonville, Florida's Lender Processing Services (LPS) shows that mortgage delinquencies and foreclosures remain alarmingly elevated.

The company's October Mortgage Monitor report also cites large "shadow" foreclosure and REO inventories. Thenumber of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline, LPS said.

Nearly one-third of foreclosures remain in pre-sale status after 12 months - twice as many as the year prior, LPS said in its study, further adding to the threat of a shadow eclipse. In addition, the six-month average deterioration ratio on troubled mortgages has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further, LPS explained.

LPS' October Mortgage Monitor reveals record high rates for non-current loans. The company reported that total U.S. delinquency rate stood at 9.37 percent at the end of September, while the nation's September foreclosure rate hit 3.12 percent - a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent.

Among individual states, it comes as no surprise that Florida posted the most troubling results, with 10.4 percent of loans in foreclosure and more than 12 percent more delinquent.

Other states reporting high levels of non-current loans - which includes both foreclosures and delinquencies as a percentage of active loans in the state - were Mississippi, Georgia, and Michigan, as well as the usual high-foreclosure states of Nevada, Arizona, and California.

The one positive reported by LPS was an upswing in loan production volume over the previous year. Year-to-date 2009 loans totaled 2,032,973, LPS said, versus 1,903,723 for the same period in 2008.

The Williamson County Association of REALTORS® today announces the sale of homes statistics for Williamson County, Tn. for the month of September 2009. There were 220 residential and condominium closings reported for the month of September, according to figures provided by RealTracs Solutions, the multiple listing service used by REALTORS® in the Middle-Tennessee area.  

Compared to September of 2008, the single family residential closings decreased 10 percent and the median price decreased by 5 percent. Condominiums closings have decreased by 8 percent and the median price decreased by 8 percent. The average days on the market (DOM) for residential homes have increased by 12 days and condominiums have increased by 5 days. Days on the market have been consistent since the onset of 2009, with the days ranging from 89 - 104 days.
   

September 2009

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Award-winning and emulated, downtown Franklin balances its rich historic character with a revitalized and prosperous mixed-use commercial district. Rapid change and development prompted by Interstate 65 construction in the 1960s threatened to destroy the neighborhood and town's heritage. Citizens responded by forming the Heritage Foundation of Franklin and Williamson County. The entire 16-block neighborhood was eventually placed on the National Register of Historic Places, and creation of the Downtown Franklin Association helped revitalize the neighborhood's commercial area.

 http://www.planning.org/greatplaces/neighborhoods/2009/index.htm#DF

Over the past several months I have been lurking in the background of Active Rain reading the BLOG posts and that arrive in my e-mail each day. Many of these posts are excellent well written articles about the industry or the state of a local market or trends where that agent, inspector or mortgage lender has specific knowledge. Unfortunately many other posts have a political overtones or viewpoints and are more editorial on healthcare reform, tax deficits or other political positions and are not about  our industry. While Active Rain is our venue to be the Real Estate, Mortgage Lender or Home Inspector Pundits in our own market I feel it is unwise for any of us to use this portal as a vehicle to express our own political or social view points towards one another or to the public.

Remember the nature of this beast we call Active Rain is to promote your industry professionalism not your political viewpoints so be careful out there...you may be doing more damage to your business than you realize.

I am not saying you do not have a right to express your beliefs or opinions I am stating that I do not believe this is the right venue for that expression.  Remember once it is out there it is out there forever.....

September 8, 2009 (Franklin, TN)-The Williamson County Association of REALTORS® today announces the sale of homes statistics for Williamson County, Tn. for the month of August. There were 236 residential and condominium closings reported for the month, according to figures provided by RealTracs Solutions, the multiple listing service used by REALTORS® in the Middle-Tennessee area.

Compared to August of 2008, the residential home closings decreased 25 percent and the median prices for residential homes sold decreased by 25 percent. Days on the market (DOM) for residential homes remained the same as compared to August 2008. Condominium closings decreased by 25 percent (7 units). The median prices for condominiums decreased by 2 percent and days on the market also increased by 27 days compared to August 2008.

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Williamson County Association of REALTORS® Announces June 2008 Housing Numbers

July 7, 2009 (Franklin, TN)-The Williamson County Association of REALTORS® today announces the sale of homes statistics for Williamson County, Tn. for the month of June 2009. There were 285 residential and condominium closings reported for the month, according to figures provided by RealTracs Solutions, the multiple listing service used by REALTORS® in the Middle-Tennessee area.

Compared to June of 2008, the residential home closings decreased 11 percent and the median price for residential homes increased by less than one percent. Days on the market (DOM) for residential homes increased by 12 as compared to June 2008. Condominium closings decreased by 30 percent. The median prices for condominiums decreased by 16 percent and days on the market also increased by 75 days compared to June 2008.

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I have helped numerous homeowners with loan modifications in an attempt to avoid foreclosure. The majority of these homeowners however continue to repeat bad habits and bad decision making processes after the mortgage has been modified to meet a very strict budget that the new payment is based upon

Here is some proof

"Redefaults" Continue...

Fitch Ratings is slated to release a report this week showing that 65 percent to 75 percent of modified subprime loans will still fall behind by 60 days or more within one year of the loan change. Although some experts believe that reducing the principal amount owed is the best way to keep distressed borrowers in their homes, Fitch found that 30 percent to 40 percent of loans that had lowered principal amounts were still redefaulting after 12 months. Borrowers are redefaulting at a high rate because home prices continue to fall, unemployment is rising, and because of public pressure to help homeowners - even those who are still likely to default even after receiving assistance.

[SOURCES: Wall Street Journal; Information, Inc.]

We grew too fast...too long and ran out of qualified buyers in 3003. Flooding the market with buyers who were given NINJA Loans (No Income No Job or Assets) the market was falsely over heated and those types of borrowers never paid their bills on time when they were renters or if they are now owners....

The market will return and the value of home ownership is still the best way for an average family to build wealth