Foreclosures Will Increase Again

Foreclosures Will Increase Again

According to this RealEstateEconomyWatch.com article, ’09 Foreclosure Binge to Produce Hangover in ‘10, despite foreclosures hitting a new record in 2009 (21% more than 2008 and 120% more than 2007), foreclosures will actually increase in 2010 and 2011 as a result of regulatory and lender delays which artificially reduced the number of foreclosures in 2009. the article states "In fact, the delay in processing foreclosures due to loan modification programs, moratoria and a system overwhelmed by the sheer volume of properties was the only reason the number of 2009 foreclosures was not greater." I guess we are going from bad to worse. No surprise here since I have been saying this for some time. Although the real estate market in 2009 was bad, it was artificially propped up and will get even worse in the next few years (see Our Phony Real Estate Market). As a result of this acceleration of the decline there will be more short sales and foreclosures in 2010-2011 and beyond.

Short Sale and Foreclosure Help and Assistance in Middle Tennessee. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN).  If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

RealtyTrac: U.S. Foreclosure Activity Up 32% from July 2008 and 7% from June 2009

According to this RealtyTrac press release, U.S. FORECLOSURE ACTIVITY INCREASES 7 PERCENT IN JULY, in July 2009 US foreclosures increased by 32% from July 2008 and by 7% from June 2009. According to the press release, July is the 3rd time in the last 5 months that a new record has been set for foreclosure activity. Again, the 4 hardest hit states were Nevada, California, Arizona and Florida. However, there were a many other notable problem areas with Utah at #5, Idaho at #6, Georgia at #7, Illinois at #8, and Colorado at #9. Tennessee ranked 22nd (worse than average), while Pennsylvania, a more stable area, ranked 34th (better than average). A complete list of the July 2009 state by state foreclosure rankings are below (courtesy of RealtyTrac):

U.S. Foreclosure Market Data by State – July 2009

		Properties with Foreclosure Filings
Rate Rank	State Name	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	%? from Jun 09	%? from Jul 08
--	U.S.	62,939	71,565	104,830	33,557	87,258	360,149	355	6.74	32.32
33	Alabama	0	0	1,630	0	452	2,082	1,026	-23.34	141.25*
24	Alaska	3	0	266	0	102	371	761	76.67	79.23
3	Arizona	2	0	14,120	0	5,572	19,694	135	16.99	47.52
21	Arkansas	104	0	1,319	0	828	2,251	572	35.03*	110.77*
2	California	50,917	0	35,802	0	21,385	108,104	123	6.99	49.55
9	Colorado	5	0	3,947	0	1,536	5,488	388	-4.12	2.08
29	Connecticut	0	1,084	0	190	295	1,569	917	7.84	-22.10
37	Delaware	0	0	0	226	72	298	1304	-12.61	125.76
	District of Columbia	267	0	219	0	35	521	546	24.94	-6.80
4	Florida	0	35,227	0	14,502	6,757	56,486	154	6.78	23.11
7	Georgia	1	0	7,616	0	3,519	11,136	356	-20.59	10.68
15	Hawaii	186	0	481	0	323	990	512	40.23	332.31
6	Idaho	1,290	0	1,051	0	150	2,491	253	32.43*	166.13*
8	Illinois	0	6,770	0	4,060	3,694	14,524	361	34.53	62.92
17	Indiana	0	1,015	0	1,881	2,290	5,186	536	-6.86	8.43
43	Iowa	0	0	227	0	374	601	2,212	7.32	20.68
30	Kansas	0	183	0	408	728	1,319	925	37.68	94.83
39	Kentucky	0	405	0	488	341	1,234	1,545	9.30	0.65
40	Louisiana	0	6	0	928	183	1,117	1,664	-23.07	9.83
41	Maine	0	138	0	212	57	407	1,712	39.38	59.61
11	Maryland	0	3,521	0	633	998	5,152	450	66.19	65.98
16	Massachusetts	0	3,548	0	1,049	517	5,114	532	58.77	43.09
19	Michigan	1	0	2,695	0	5,561	8,257	548	-39.32	-28.76
20	Minnesota	12	0	2,266	0	1,847	4,125	559	23.80	146.86
45	Mississippi	0	0	354	0	124	478	2,625	-36.69	151.58*
27	Missouri	5	0	1,729	0	1,441	3,175	834	2.02	-9.60†
47	Montana	0	0	2	0	88	90	4,839	45.16	-36.62
46	Nebraska	0	164	0	5	26	195	4,004	30.87	-70.45
1	Nevada	7,139	0	7,833	0	4,563	19,535	56	4.11	94.18
31	New Hampshire	0	0	611	0	12	623	954	42.24	-31.01
18	New Jersey	0	4,210	0	1,505	752	6,467	541	49.25	39.92
32	New Mexico	0	479	0	270	128	877	983	23.52	61.21*
38	New York	0	4,613	0	871	470	5,954	1,334	22.76	-3.45
36	North Carolina	1,120	0	756	0	1,552	3,428	1,203	7.97	-20.33
48	North Dakota	0	1	0	26	23	50	6,211	56.25	-23.08
12	Ohio	0	5,062	0	3,032	2,927	11,021	460	-2.05	-18.10
35	Oklahoma	595	0	522	0	420	1,537	1,056	18.69	-11.05
10	Oregon	29	0	2,463	0	1,113	3,605	446	15.80	84.40
34	Pennsylvania	0	1,869	0	1,805	1,642	5,316	1,030	7.59	27.36*
28	Rhode Island	0	0	17	0	488	505	893	-44.63	2.23
26	South Carolina	0	1,209	0	484	735	2,428	833	44.01	82.15*
42	South Dakota	0	60	0	56	48	164	2,178	45.13	446.67*
22	Tennessee	0	0	2,263	0	2,309	4,572	596	-2.20	0.15††
25	Texas	24	0	7,194	0	4,859	12,077	781	0.45	16.64
5	Utah	1,234	0	1,728	0	732	3,694	250	6.42	93.30
50	Vermont	0	0	0	0	11	11	28,312	0.00	120.00
14	Virginia	5	0	3,927	0	2,474	6,406	511	23.48	11.51†
13	Washington	0	0	3,632	0	1,738	5,370	511	14.79	94.42*
49	West Virginia	0	0	119	0	20	139	6,350	21.93	265.79
23	Wisconsin	0	2,001	0	926	890	3,817	671	8.10	86.74*
44	Wyoming	0	0	41	0	57	98	2,473	16.67	-26.32

* Actual increase may not be as high due to data collection changes or improvements
† Collection of some records previously classified as NOD in this state was discontinued starting in January 2009
† Collection of some records previously classified as NOD in this state was discontinued starting in September 2008

U.S. Foreclosure Rates Heat Map – July 2009

A US Foreclosure Rates Heat Map for July 2009 is below (courtesy of RealtyTrac). As you can see, many counties in Tennessee experienced high rates of foreclosure activity in July 2009. Although the map is small (and difficult to tell for sure), it appears that some of the hardest hit counties are Davidson, Williamson and Rutherford. Rutherford County TN appears to have one of the highest foreclosure rates in the entire the state of Tennessee.

After the RealtyTrac press release was issued, a Bloomberg article, U.S. Foreclosure Filings Set Third Record-High in Five Months, obtained additional information from the following real estate sources and experts.

• National Association of REALTORS (NAR) - The median price of an existing single-family house dropped 15.6 percent to $174,100 in the second quarter of 2009, the most in records dating to 1979.
• Zillow - Almost one-quarter of U.S. mortgage holders are now underwater (i.e. they owe more in mortgage debt than their homes are worth).
• Stuart Gabriel (director of the UCLA Ziman Center for Real Estate in Los Angeles) - “There are a slew of factors showing fundamental weakness on the demand side: tighter underwriting, job loss, investors who’ve been badly burned. We have not seen the bottom of the housing market.”
• Diane Swonk (chief economist at Chicago-based Mesirow Financial Inc.) - “We’re in a deep hole. There is a whole new wave of foreclosures tied to the cyclical dynamics of the economy. It has been more profitable to put a home in foreclosure than restructure the loan. The only thing that helps is forgiveness of principal, and there is little willingness to do that.”

The information above from RealtyTrac and the additional information and quotes are all proof that what I said several months ago is true: "The worst is yet to come." The real estate market is still declining and will actually accelerate downward starting in the summer of 2010. The major issues that will continue to harm the real estate market are as follows:

• Continued job losses.
• More and more homeowners underwater.
• Massive government debt which will result in higher interest rates.

There is no way to escape what is coming. All the events that will cause the impending declines have already happened.