New Wave of Foreclosures

Managing Real Estate Broker with Flexit Realty "Flexible Home Selling Solutions"

Just when all the news services say the average home price is leveled off, the economy is doing better jobs reports don't show the proof.  

It was not that long ago the 5 major banks make a deal with the federal government on "robo-signing" and held back on foreclosures, as I mentioned in another post, when everyone was so happy to see a slight decline in foreclosures.  That was the "Phantom" surge where a myth was perpetuated to make consumers feel good that the economy was getting better.

One of the leading mortgage process servicing companies says business jumped 28% in February.  Although youHidden Foreclosure Market may think because of the decline of about 47% in foreclosures in 2011 this can't be true tighten your belt here are some hidden facts not being reported on your television yet.

Deutsche Bank has started this year up 47% over 2011, Wells Fargo has risen 68% and good ole Bank of America including BAC Home Loans has jumped 7 times it's estimated foreclosure rate for 2011 in the same months.  None of the lending institutions have responded to questions or numbers according to the investigative reporter from Reuters.

The housing experts are saying the warning signs of a new wave of foreclosures can be expected across the United States.  This may be good for investors but certainly isn't good for homeowners, communities or families.  Putting value into homes and neighborhoods was the foundation of our economy.  Take away the home and you take a major chunk out of the economy.

Another report shows the number of homes with three generations living together is up significantly.  This is no surprise based on the foreclosure rate and our economy.  More of my clients have grown children living with them now than ever before.  The side benefit is they are becoming families again instead of separate lives with little inner activity.

RealtyTrac showed a slight drop in foreclosures from January to February nationwide but 21 states jumped with some cities like Tampa up 64%, Chicago 43% and Miami 53%.  The change in foreclosure profiled now is not the toxic mortgages or the high interest rate mortgages.  It is affecting American's who had always been able to meet their obligations.  People that maintain their credit with pride of ownership.

Zillow reported that expect a 3.7 drop in home prices on average this year because of excess bank inventory and it may be 2013 before we see the bottom.  Amherst Securities doesn't report much better numbers.  They think we have some 9.5 million families that may lose their homes to foreclosure.

Changes are also in the wind for Fannie and Freddie with regard to modification guidelines for existing homeowners.  The benchmark on how much is owed is changing.  If your debt exceeds a certain percentage you may not qualify for a modification loan that you could have gotten last year.

Real estate agents that understand the market will be able to help sell some of these homes.  Others that have listed properties without the right price will find their listings still for sale many months past the seller's expectations.

What are your thoughts?  Complete article by Reuters


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Susan Shaw
Premiere Plus Realty Co.Marco Island, FL - Marco Island, FL

Interesting post. I live and sell here on Marco Island, Florida. Most agents seem very optimistic about our market and things have really improved this year with  single  family homes in particular selling and in a shorter time. But, and here is the big BUT, I know there are still lots of vacant homes here held by the banks, and I'm just hoping that when they come back on the market they will release them a few at a time rather than flooding the market again. This would be disasterous for our market.

Apr 06, 2012 11:34 PM #1
Sara Homan
Coldwell Banker Ellison Realty 352-209-4044 - Ocala, FL
Realtor, Homes, Farms & 55+

Gary,  I've heard all the fluff, smoke in mirrors if you will.  It is nice to hear the truth even if it is grim.  We can't deal with challenges if we think all is well when it's really not!   Thanks for the info

Apr 06, 2012 11:36 PM #2
Erv Fleishman
Realty Associates - Boca Raton, FL
Luxury Prop Specialist Realty Associates

It is, what it is. 

Where will we be five years from now?

Apr 07, 2012 01:22 AM #3
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Gary my bet is that we still have a couple of years before we are out of the woods as well.

Apr 07, 2012 10:37 PM #4
June Piper-Brandon
Remax New Beginnings - Baltimore, MD
Piecing Dreams One Home at a Time

Gary, Just what our economy needs.  I think in Maryland we are buffered somewhat from t he rest of the country because of our proximity to DC (which has some perks) but I've seen an increase in short sales.

Apr 08, 2012 06:23 AM #5
Lauren Selinsky Broker CRS
California Coastal Estates - Aliso Viejo, CA
"Your California Real Estate Broker" TM #oclauren

I am getting a bit of the same info., but not sure if Zillow is right on... I am hearing it will be about another 8% drop. We will see... Perhaps, it will level out a bit by 2013.

Apr 08, 2012 04:42 PM #6
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