Over 6,600 Home Foreclosure Filings Per Day

Over 6,600 Home Foreclosure Filings Per Day

According to this REUTERS article, Foreclosures mark pace of enduring U.S. housing crisis, in the US there is a foreclosure every 13 seconds which translates into "more than 6,600 home foreclosure filings per day, according to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina. With nearly two million already this year, the flood of foreclosures shows no sign of abating any time soon."

According to the article, "the country's worst housing downturn since record-keeping began in the late 19th century may only get worse since foreclosures, which started with subprime borrowers, have now moved on to the much bigger prime loan market on the back of mounting unemployment. In congressional testimony last month Michael Barr, the Treasury Department's assistant secretary for financial institutions, said more than 6 million families could face foreclosure over the next three years."

The article references a September 2009 report from a FL foreclosure task force as finding that people are now defaulting on their mortgages for different reasons. The report states "People are no longer defaulting simply because of a change in the payment structure of their loan. They are defaulting because of lost jobs or reduced hours or pay."

According to the article, "A recent pickup in sales and home prices in some regions has been heralded as a sign that the crisis in residential real estate may be close to bottoming out, after the steepest price decline since at least 1890. But nearly half of recent sales have been attributed to foreclosures or "short sales" at bargain-basement prices. Even as the U.S. economy seems to be recovering from its worst recession since the Great Depression, mortgage delinquencies continue to rise. And that adds risk to any relatively upbeat assessment, since foreclosures depress the value of nearby properties while eroding the net worth of homeowners and the tax base for communities nationwide. The Center for Responsible Lending says foreclosures are on track to wipe out $502 billion in property values this year. That spillover effect from foreclosures is one reason why Celia Chen of Moody's Economy.com says nationwide home prices won't regain the peak levels they reached in 2006 until 2020. In states hardest-hit by the housing bust, like Florida and California, the rebound will take until 2030, Chen predicted."

The article quotes Celia Chen of Moody's as saying "The default rates, the delinquency rates, are still rising. Rising joblessness combined with a large degree of negative equity are going to cause foreclosures to increase. Anyone doubting that the recovery in U.S. real estate prices will be long and hard should take a look at Japan, Chen said. Prices there are still off about 50 percent from the peak they hit 15 years ago."

According to the article, the chief economist for the Mortgage Bankers Association, Jay Brinkmann, thought that foreclosures would peak in the second half of 2010. The problem is that this somewhat rosy prediction is based on unemployment falling in 2010 after reaching a peak "barely in double digits by the middle of next year." As we already know, the US unemployment rate reached 9.8% in September 2009 and show no signs of going down anytime soon.

I think this article provides even more evidence that the US real estate/housing short sale and foreclosure crisis is not going to end anytime soon. As more people lose their jobs, short sales and foreclosures will increase for the next several years since it will take until at least 2011 before the unemployment starts to go back down and even then it will take until at least 2012 or 2013 before the US unemployment reaches a level where people can afford to pay their mortgages. The net effect of all this will be that US real estate and housing prices will continue to decline for the next several years leaving more homeowners underwater.

If you are a homeowner in Middle Tennessee who is unemployed, have seen your income decline, has been turned down for a loan forbearance or loan modification and your home is worth less than your mortgage balance, please contact me to discuss selling your home via a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.

If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle TN Short Sale and Foreclosure Expert and REALTOR.

Rutherford County Tennessee: Foreclosures up 22% in 2009 versus 2008

Rutherford County TN: Foreclosures up 22% in 2009 versus 2008

According to this DNJ.com article, Growth slower, but still strong, "Rutherford County ranked 36th nationally in residential housing growth over the first six years of this decade but dropped to 68th during a recession the last two years, the U.S. Census reported. The county as of July 1, 2008 had 101,708 housing units, representing a 44 percent growth from the 70,616 units in April 1, 2000, according to a Census study of the 100 fastest growing counties with at least 5,000 housing units."

The article mentions that Rutherford County Tennessee is a great place to live. I agree with this. However, in my opinion, the most important information stated in this article is "The slumping economy has included an unemployment rate above 10 percent and a rise in foreclosures. The county since Jan. 1, 2008, has had 1,609 sales of foreclosed property, representing 13.3 percent of the 5,791 real estate transactions, according to the Property Assessor's Office. In 2009, the county has had 721 sales of foreclosed property, representing 16.2 percent of the 4,363 transactions so far. Overall, foreclosures are probably representing around 1.6 percent of the county's 105,410 parcels, Deputy Assessor Bill Gibbs said."

There are a couple of important points to make here:

• The 10%+ unemployment rate in Rutherford County TN is not good.
• The 22% increase (16.2% in 2009 versus 13.3% in 2008) in the percentage of total real estate sales in Rutherford County TN that are foreclosures is also not good.
• The Rutherford County TN foreclosure figures above do not include short sales and other non-foreclosed distress sales.  While the article did not provide information regarding these figures, I have done my research via the Middle Tennessee MLS and have found that in 2008 there were a total of 3,762 Closed Sales in Rutherford County TN and 285 of these sales were short sales and foreclosures.  In 2009 YTD so far there are a total of 2,596 Closed Sales with 437 of these sales being short sales and foreclosures.  This means that so far in 2009 short sales and foreclosures are accounting for 16.8% of all sales.  Since many distress sales (i.e. short sales and foreclosures) are not put into the MLS and not all short sales and foreclosures are properly identified in the MLS I think it is reasonable to conclude that short sales and foreclosures could easily make up as much as 20% of the real estate sales in Rutherford County TN in 2009. Given the high unemployment rate I see no reason why this percentage will decrease any time soon.

If you are a homeowner in Middle Tennessee who is unemployed or suffered a reduction in your income and has been turned down for a loan forbearance or loan modification and your home is worth less than your mortgage balance, please contact me to discuss selling your home via a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.

If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle TN Short Sale and Foreclosure REALTOR.

Forbearance: A New Plan for Temporary Mortgage Payment Relief

Forbearance: A New Plan for Temporary Mortgage Payment Relief

According to this New York Times article, A Plan for Forbearance, due to continuing high unemployment "federal regulators are intensifying efforts to curb the effects of job losses or underemployment before they fuel another wave of home foreclosures. The Federal Deposit Insurance Corporation (FDIC), which protects consumer deposits when banks fail, recently recommended that lenders provide certain borrowers with a temporary respite from mortgage payments, or a forbearance. That relief would last up to six months, and sometimes longer, as the lenders work on long-term loan modifications."  This new forbearance plan was announced in September 2009.

The article quotes Michael H. Krimminger, the special adviser on policy to the FDIC chairwoman Sheila C. Bair, as saying "We want to make sure lenders do this as a strategy to mitigate losses to the F.D.I.C., but also because it’s the right thing to do."

According to the article, the FDIC's plan recommends (i.e. does not require) that certain lenders (see below) reduce loan payments to "affordable levels" for borrowers who cannot pay their mortgages as a result of login their jobs, or having their incomes reduced.  The FDIC says that the new reduced mortgage payments would "be low enough to allow for reasonable living expenses in addition to the mortgage."  The plan "applies only to the 53 financial institutions that relied on the F.D.I.C.’s insurance fund while acquiring failed banks. It does not include the four major mortgage lenders: Citigroup, Wells Fargo, JPMorgan Chase and Bank of America. These banks already have unemployment forbearance programs, though they differ from the F.D.I.C. plan."

The article offers some information about about the proprietary plans offered by Wells Fargo, Bank of America, Citigroup and JPMorgan Chase.  A summary of those plans is below:

• Citigroup - The article states that in March 2009 "Citigroup introduced its Homeowner Unemployment Assist program, which lowers the monthly payment for many unemployed borrowers to $500 for three months. To qualify, a homeowner must have a loan owned and serviced by CitiMortgage, and be 60 days or more delinquent, among other things."
• Wells Fargo - The article states that Wells Fargo has had forbearance programs in place for years for years for "unemployed borrowers who cannot pay their mortgages".  According to Debora K. Blume, a Wells Fargo spokeswoman, the forbearance terms are "highly dependent on the customer’s full financial and personal circumstances."
• JPMorgan Chase - The article states that a spokesman for JPMorgan Chase said "if the borrower’s income is too low or not certain, but there are prospects for future employment, we may offer a loan forbearance program that allows a borrower to pay a reduced amount, or even zero, for a limited length of time, often three months."
• Bank of America - The article states that "Bank of America offers up to six months of forbearance, according to Jack Schakett, the bank’s credit loss mitigation strategies executive."  The article quotes Mr. Schakett as saying "borrowers generally receive better forbearance packages if they have "reasonable prospects for employment," though his bank also examines their financial management skills. Bank of America looks at mortgage-payment habits and overall debt payment success, among other things.  People who were already struggling with their mortgage payments would be less likely to end up with a job that would help them be successful in the future."

According to the article, the lenders insist that "they have been working together, and with the federal government, to create more consistent strategies for unemployed borrowers."  Personally, I laugh at this.  Lenders are completely botching this situation and causing significantly more short sales and foreclosures than they need to.

If you are a homeowner in Middle Tennessee who has lost their job, but have either been turned down for a loan forbearance or loan modification, or you still cannot pay your mortgage and your home is worth less than your mortgage balance, please contact me to discuss selling your home via a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.

If you need to sell your home fast via short sale you can my request help on my website JimTheRealEstateExpert.com.

Residential Home Sales Market Statistics: A Comparison of Normal Sales versus Short Sales and Foreclosures in September 2009

Middle Tennessee Residential Property Foreclosure Activity Report
Residential Real Estate Market Sales Activity - Foreclosures, Pre-foreclosures and Short Sales Compared to Regular Listings
Counties & Cities/Towns Covered:
Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
Williamson County Tennessee: Brentwood TN and Franklin TN
Month & Year	Sep-09
Start Date	9/1/2009
End Date	9/30/2009
City/Town	Active Listings - Total	Active Listings - % Foreclosures & Short Sales	Pending Sales - % Foreclosures & Short Sales	Months of Residential Inventory Based on Pending Sales Rate
Murfreesboro	1,254	8.29%	10.45%	6.24
Smyrna	348	12.07%	32.65%	7.10
La Vergne	280	23.21%	50.00%	5.60
Brentwood	615	4.39%	3.57%	10.98
Franklin	1,058	3.31%	5.62%	11.89
Totals & Averages	3,555	7.68%	15.51%	7.99
Notes:
As you can see from the chart above the percentage of Pending Sales that are distress sales (Foreclosures and Short Sales) is greater than their representation as a percentage of Active Listings.  This means that these distressed listings are Pending (i.e. selling) at a faster rate then regular listings.

Moody’s: Homebuilders May Lose $500M in 2010

Moody’s: Homebuilders May Lose $500M in 2010

According to this HousingWire article, Homebuilders May Lose $500m in 2010: Moody’s, US home builders will likely lose a combined $500 million in 2010.

According to the article, "US homebuilders still face risks, despite improvements in home sales and housing starts, and Moody’s Investors Service expects building industry's operating losses to worsen by 8% in 2009. Moody’s vice president and senior credit officer Joe Snider expects homebuilders to continue generating pre-impairment operating losses over the next 12 to 18 months. An increase in foreclosures and weak employment figures will contribute to house prices at their currently low levels, and might cause prices to fall more and for a longer period than currently anticipated."

The article quotes Snider as saying "We expect that the industry’s one relatively bright spot — that is, robust cash-flow generation — will keep fading in the year ahead, as inventory liquidation plays itself out and funds from operations remain negative."

If you live in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN) you have probably seen all the new neighborhoods and the advertisements from the builders promoting all the incentives they are offering to buyers. Please understand that if you are buying a new home today you are likely paying too much. Frequently, you can buy a very similar new, or newer, home that is a foreclosure or short sale for less than the cost of construction and less than you can buy it from the builder. You can use my website to search the Middle TN MLS so that you can find a distressed property, a foreclosure or a short sale in Middle Tennessee.