Foreclosures are Bad for Those Loosing Their Homes
You’ve probably seen stories in recent weeks about how foreclosures are starting to rise in the subprime mortgage market. Compared to one year ago, foreclosures are up 68-percent. This post will likely find kindred spirits here: Slate economics columnist Daniel Gross (Yes, the same guy who wrote "Pop: Why Bubbles Are Great for the Economy") argues that government efforts to stop foreclosures are ultimately bad for the economy. Home foreclosures are also a significant issue today. These foreclosures are highly concentrated – subprime mortgages account for 50 percent of foreclosure starts, even though they are only 13 percent of all mortgages outstanding. "Mortgage foreclosures are causing havoc in many of our communities,"said Cynthia McCollum, president of the National League of Cities andcouncil member from Madison, Ala. UF: Commercial real estate outlook guarded According to the University of Florida, commercial real estate foreclosures are not at critical levels like the media leads on to be. Florida: Condo MeltdownMiami condo foreclosures are one the rise, many Brickell pre-construction condos are the worst hit.But if foreclosures are pervasive in the marketplace, then that becomes the market.
Yes, foreclosures are negatively impacting the market in many neighborhoods of this Dallas-Fort Worth market and by all indications will continue until the oversupply situation gets back in balance,But the reality is that foreclosures are skyrocketing in Colorado, and are 3 times higher than the national average; from National Foreclosures Up 63 Percent From a Year Ago:Colorados foreclosure rate leapfrogged to highest among the states thanks to a 31 percent increase in new foreclosures from the previous month. Here is a state with strong job growth and plentiful ARMs--and foreclosures are leaping. So far this year, foreclosures are up 566 percent.
Foreclosures are especially evident in communities with lower-price houses, such as Sterling Park and Sugarland Run in eastern Loudoun, Newton said. Foreclosures are having a huge impact in Grand Rapids,Michigan. Foreclosures are up over 500% this year (2007) in the Coachella Valley. Foreclosures are increasing dramatically in the Orlando area and across Florida. Foreclosures are on the rise throughout San Diego, and as Kelly Bennett explains, the worst may be yet to come.
PT Foreclosures are up in King County and across state Locally and nationally, they have not yet peaked, real estate researcher reportsBy AUBREY COHENP-I REPORTER. Even in New York City and Boston, where real estate markets are white-hot, foreclosures are rising in working-class neighborhoods. Doug Azarian, the president of the Massachusetts Association of Realtors, also said foreclosures are concentrated mostly in lower-priced neighborhoods where borrowers with poor credit obtained subprime mortgages. , and Las Vegas, markets where the number of foreclosures are relatively low, but rapidly rising, are also causing concern.
The Bank
Banks no longer hold loans on their books; instead, they sell them into a secondary market where loans are bundled with others and sold to investors as mortgage bonds. Bankruptcy reform alone could, on some estimates, avert 500,000 foreclosures.
Banks are incredibly inflexible stupid bureaucracies, in which people are losing other people's money so it is not too personal (except to the people losing their homes). Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return. Banks, lenders, appraisers and home buyers made bad decisions and often broke laws. Banks, like all contracting parties, deserve the certainty that their contracts will be legally enforceable. Banks made bad decisions in loaning money to folks who could not pay. Banks regularly take 4-8 weeks just to respond to an offer, and if a property is already in the foreclosure process, that time could easily extend past the Notice of Foreclosure Sale date. Banks, faced with the mounting costs of holding properties, are cutting prices.
