Unemployment fuels spike in February foreclosures
Foreclosure filings rose 6% from January and 30% compared with a year ago, despite foreclosure-relief efforts by the government and financial institutions.
Foreclosure prevention efforts and moratoriums by banks and government institutions failed to stem the nation's foreclosure problem in February. Foreclosure filings were reported on 290,631 properties during the month, a 30% increase from February 2008, and a 6% increase from January, according to foreclosure listings firm RealtyTrac.
It was the third-highest monthly total since RealtyTrac began tracking foreclosures at the beginning of 2005, trailing the sharp spikes in delinquencies in August and December of last year. (RealtyTrac is a partner of MSN Real Estate.) The RealtyTrac report echoed news last week by the Mortgage Bankers Association that a record 11% of all mortgages were either behind in payments or in foreclosure in the fourth quarter of last year — the highest number since it began tracking foreclosure data in 1972, and the largest quarter-over-quarter surge in mortgage delinquencies.
These days, rising unemployment — not just problem loans — is driving the surge, says Rick Sharga, RealtyTrac senior vice president, as delinquency rates outpace the overall rate of foreclosure activity. "This month's report is the first time we've seen specific evidence of this," Sharga says, noting that economically hard-hit Oregon, Illinois and Idaho moved into the top 10 – a first for Illinois and Idaho. "All three (increases in foreclosure activity) appear to be due to unemployment-related activity."
Unemployment was similarly singled out as a leading foreclosure factor by Jay Brinkmann, the MBA's chief economist, in a statement last week. "The delinquency rates continue to climb across the board for prime fixed-rate and subprime fixed-rate loans, loans whose performance is driven by the loss of jobs or income rather than changes in payments," he said.
In January, jobless rates rose in 49 states and the District of Columbia compared with the prior month, and all had increases over the previous year, according to the U.S. Labor Department. Hardest hit were states in the West and Midwest where manufacturing, construction and retail employment has cratered.
Nevada, Arizona, California still lead in foreclosures
Nevada posted the highest foreclosure rate in the U.S., with one in every 70 homes receiving a filing. It was followed by Arizona, with one in every 147, and California, with one in every 165.
Nevada's total filings — from notice of default to bank auction — on 15,783 homes represent a 158% increase from February 2008 and a 9% spike from the previous month.
Arizona's notices on 18,119 properties represent an 88% increase from last year and a 23% increase from the previous month.
California's filings on 80,775 properties register as a 51% increase from last year and a 5% increase from January.
An ugly March?
With many foreclosure stays ending this month and unemployment on the rise, Sharga expects to see a significant spike in foreclosures for March. Foreclosure relief outlined recently by President Barack Obama probably won't begin to affect this rate for months, analysts say.
And even then, Sharga says, it's hard to tell how many homeowners would qualify for the relief, given included limits on how much homeowners can be "underwater" on their home and the uncertainty surrounding securitized loans.
All of this has Sharga expecting that the peak of this foreclosure crisis won't happen until the second or third quarter. "It's difficult to tell when the bottom is going to be," Sharga says. "But I think we can see it from here."
States ranked by February 2009 foreclosure rates
|Rate Rank||State Name||Total||% chg. from Jan. '09||% chg. from Feb. '08||1 per X households (rate)|
|District of Columbia||379||83.09||11.47||750|
|*Actual increase may not be as high due to data collection changes or improvements|
Some people seem to think that having ideals is a bad thing. I beg to differ, but I do think the president and the government have to act more on the behalf of the people as a whole rather than specific interests groups. We , as in the people, should not be bailing out anyone from mistakes that were made. But at the same time we can help them and us out of a difficult predicament and prevent it from being made again.
I believe we have to right away make it mandatory for the banks to refinance (ALL) mortgages that are facing foreclosure with longer terms and lower rates. It will make it possible for many people to keep their homes, and will cost the banks nothing except for the fee to refinance which can be worked into the mortgage. I think that it is a win win situation. Of course there will be some that still will not be able to make payments, and these people will still face foreclosure. But at least those with good intentions and who were mislead by the banks were given the second chance to try.
I believe the banks have to begin to invest in their communities. Making it possible for the small business to thrive. Our government has given them many dollars to supposedly prevent them from collapse by doing just this. And instead they are holding on tight to it or investing it elsewhere. That was huge mistake. That's like loaning money to family and friends without any terms of repayment. How could they then claim them to fault? There should be certain restrictions and guidelines of repayment as when making any loan. I thought that was taught in any business law or economic class 101. But now since the mistake has been already made how do we fix it? Well for first i would call in the loan, or at least the portion that has not been used as of yet. Until the banks have shown how the money that they have already received was used , other money should be not be given. The banks have shown that they are not looking out for their community but for only themselves. The banks have not made refinancing an easy option, and the homes that have already foreclosed they are not so quick to unload at these low current prices. Sort of makes me wonder as to why? Maybe holding out for a short time to then make a huge bonus profit later on.
I believe we have to invest in the infrastructure of our country. Building and repairing of structures. Updating the transport system and fixing the roadways. This will not only bring our country into the future but create many jobs which can put the many unemployed back to work. We have to keep businesses running and money circulating to keep our economy alive. Now would be a fabulous time to begin to build a gated wall along our boarders. First with mexico, where we have so many people enter into our country illegally, and then along the canadian boarder. This will also protect us from potential terrorists who are seeking to destroy and hurt our country.
I believe the government has to re-establish the regulations that were put into place after the first great depression. They were there for a reason: to prevent the banking failure and subsequent crash from ever happening again. Slowly they were chipped away beginning with Reagan , then continuing on with Bush, Clinton, and Bush Jr. Each in part for their own agendas.
I believe that its not unpatriotic to think that portions of our government need to be changed. I think congress is too large and not specialized enough into groups that can focus on their areas of expertise. The committees then can make knowledgable decisions when creating policy and laws. You wouldn't hire a lawyer to perform open heart surgery would you? Along with this I would throw out all lobbyists from the halls of congress. This is not only a waste of precious time and expense to the taxpayers, but is beneficial to no-one except the company that hired them. It only leads to corruption.
Finally, I'm sick of all the negative attacks on Obama. He has made some mistakes, as have we all,
That is so true I'm an investor and I waited 3 weeks for an answere and for what they rased the price by 20,000.00 of the asking price. So these banks are in no hurry to sell WHY? because the more houses they have in foreclosure the more money they'll get from uncle sam. That's WHY. You are only giving them hundreds of thousands the goverment is giving them billions.
Here is a link to back up what I said about the foreclosures and how many people are being scammed. Check out this link and then maybe you will see what I am talking about.
If you want to go there. How about all of the welfare that is handed out to perfectly healthy, able-bodied people in this country? That is one of the democrats favorite thing. How much is spent on that a year.
The lack of responsibility for your actions and consequences is a big problem. And that is what we are teaching our kids.
Uh yeah. Apparantly republicans didn't believe in watching the news when the economic crisis started with the banks during the Bush administration.
The problem was they were loaning money at low interest rates to make people afford homes that they ordinarily would not be able to afford. When the interest rates went up people stop being able to pay the loans.
This was not Obamas fault and its not a problem that can be fixed over night. This is a product of greedy bankers and stupid people that bought without considering that they may not be able to afford it if interest rates changed.
I have yet to hear one republican give an idea on how to fix it. What do they say? Leave it to the people. Yeah that worked so well, greedy bankers screwed people and people made bad choices. So what we are suppose to leave it to the "people" to screw up the economy even more?
There is a reason that republicans are losing ground with educated people. They have always relied on fear and so called morals to get them by. They have no real concept on how to make things work.
I am starting to wonder if there is a republican out there with anything but complete stupidity to say.
These problems occured during the BUSH administration. Apparantly you have no concept on why the mortgages were a problem. Your expecting Obama to fix a mess that took Bush 8 years to create?
Honestly I would love to meet a republican that wasn't a complete idiot. Unfortunately they seem to be extinct.
As for republican states being the healthiest? LOL If Republicans are so good for the economy why are we in this mess in the first place?
Let me get this correct. People who could not normally afford a home, purchased homes at over-inflated prices with no money down with sub-prime loans, interest only payments with a balloon of 3-5 years. The government is now considering bailing out these people, to prevent additional foreclosures, by taxing the heck out of people who lived within their means and saved their money.
Perhaps it is time to re-evaluate the skill and IQ of our elected officials, including the "fast talking but poor leading" Obama. It is beginning to appear as if we elected a black Jimmy Carter--high ideals and no skill.