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Foreclsoure News: 7.5 Million Loans in Some Form of Delinquency

22 Mar

This piece from TheruthAboutMortgages.com puts a little more realistic perspective on the current housing crisis and where it really stands today.

Just consider the end of this article and the statistics that show that 31% of loans that have been delinquent for over 6 months have no foreclosure actions taking place. that menas that there are 31% of mortgages in serious default that are not showing up in any of the ‘normal’ statistics… Oh, but wait.. we’re in a ‘recovery’!
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<a href=”http://www.thetruthaboutmortgage.com/foreclosure-backlog-in-full-effect/”>Foreclosure Backlog in Full Effect</a>

By now, we’ve heard plenty about the so-called shadow inventory, which is the pending supply of homes owned by banks and lenders that aren’t on the market for various reasons.

These (millions of) properties distort the overall housing inventory picture, making it appear as if we’re in better shape than we really are.

If these homes were to be unloaded all at once, it’d be a major drag on home prices and would likely destroy any semblance of a recovery.

At the same time, there’s a major foreclosure backlog, as evidenced by the latest monthly Mortgage Monitor report from Lender Processing Services.

The company revealed today that nearly 7.5 million home loans are in some stage of delinquency or foreclosure, while an additional one million properties are in REO or post-sale foreclosure.

However, more than 31 percent of loans that have been delinquent for six months are not yet in foreclosure, and 22.8 percent of loans 12 months delinquent have not been moved to foreclosure status either.

The latter number is up from nine percent in 2008, which shows just how bad the foreclosure backlog is becoming.

The delay could be the result of numerous loan modification programs, such as HAMP, foreclosure moratoria, accounting tricks, and so forth.

During January 2010, 346,000 borrowers became delinquent for the first time – the national delinquency rate now stands at 10.2 percent, while the foreclosure inventory rate is 3.3 percent.

In another piece, TheTruthAboutForeclosures.com reported:

Foreclosure Starts Rise 20 Percent in California

Notices of default, the first step of the foreclosure process, increased 19.69 percent in California from January to February, according to ForeclosureRadar.com.

The company, which claims to track every California foreclosure, said NODs increased to 31,004 during the month after declining for four straight months.

However, such filings were 37.74 percent lower than levels seen a year earlier, likely thanks to a number of loss mitigation programs currently in place.

Filings of Notices of Trustee Sales, which set the date and time of a foreclosure auction, also increased month-to-month, rising 3.6 percent to 28,195.

However, foreclosure sales, which are the actual loss of a property to foreclosure, fell 11.9 percent in February.

“The disconnect between delinquencies, and foreclosure sales continues to widen,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com, in the report.

“While efforts to slow foreclosures are clearly working, it remains unclear that anything has yet addressed the core problem of excess household mortgage debt.”

Foreclosure inventory (shadow inventory) remained relatively flat month-to-month because the number of properties exiting the foreclosure process nearly matched the number of new Notice of Trustee Sale filings, though scheduled sales are up 126.34 percent from a year ago.

The hope is that the many loan modifications being offered to scores of borrowers actually stave off foreclosure, instead of simply delaying the inevitable and exacerbating matters.

 
 

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