Q2 Foreclosures Double

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“Forty-eight of 50 states and 95 out of the nation’s 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter."
-RealtyTrac CEO James J. Saccacio, Q2 U.S. Foreclosure Market Report. 

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The latest RealtyTrac foreclosure data is out, and it is rather astonishing: Almost 740,000 properties were in some stage of the foreclosure
process, the most since they began tracking this data in January 2005. That represents one in every 171 U.S. homeowners that either 1) lost their house to foreclosure; 2) received a default notice or 3) was warned of a pending auction. This is an increase of 121% from a year earlier, and is a 14% rise  quarter over quarter. Falling home values have prompted RealtyTrac to almost double the
projected number of foreclosures this year to about 2.5 million.

Pimco’s Bill Gross noted that 25 million U.S. homeowners might soon be underwater — risk owing more than the value of the their homes, according to Bloomberg. That would make it nearly impossible to negotiate better loan terms or sell their property without some additional cash contribution.

As the chart below shows, the number of properties with some sort of foreclosure action against them (default notice, auction notice, bank repossession) has risen for the past eight consecutive quarters.

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US Quarterly Foreclosures by QuarterForeclosure_data_q2_08

chart courtesy of RealtyTrac

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Sources:
Is Eight Enough?
darenb
RealtyTrac, July 25, 2008 2:00 AM
http://www.foreclosurepulse.com/archive/2008/07/24/104347.aspx

Foreclosures Double in Second Quarter as U.S. Home Prices Fall
Bob Ivry   
Bloomberg, July 25 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aomtw8.Pro2E&

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What's been said:

Discussions found on the web:
  1. jhunt commented on Jul 25

    all is well, ALL IS WELL!

  2. Mista B commented on Jul 25

    Crikey! Seeing numbers like this simply amazes me, not because the numbers themselves are at all surprising at this point, but because numerous pundits are calling for a bottom in financials on a daily basis. With foreclosures still rising, along with unemployment, further significant writedowns are all but guaranteed. Those who don’t see the possibility of a severe recession are blind, imo. That doesn’t mean it’s necessarily going to happen, but it’s certainly a possibility at this point. We’re seeing no signs of a bottom in housing. None. I see ‘For Lease’ signs everywhere here in FL. There are abandoned properties in almost every neighborhood (got one right next door; nice neighborhood too). And the problem is worsening. We’re nowhere close to a bottom and a turnaround, not with prices falling and buyers staying away.

  3. dave c. commented on Jul 25

    $300 billion from the government won’t stop this tsunami – maybe slow it down a tad (maybe) and make it worse in the long wrong. The money was lent, it was spent, and it cannot be repaid. The question now is who gets stuck with the bill, and can the stuckee survive the bill? The dollar is toast. dc.

  4. Lars commented on Jul 25

    Will this bring an era of buying homes people can afford? Think smaller houses.

  5. Vermont Trader commented on Jul 25

    Today is remittance day in the subprime world…

    Should start rolling in this afternoon.

  6. dave c. commented on Jul 25

    “Only a fool makes predictions” so let me get my chance. Uncle Ben’s next move is to ease 25-50 bps. dc.

  7. OkieLawyer commented on Jul 25

    The question now is who gets stuck with the bill, and can the stuckee survive the bill?

    From “too big to fail” to “too big to bail” perhaps?

  8. JustinTheSkeptic commented on Jul 25

    The Durables number just came out +.8

    So now the CNBC Guru Bulls are yelling turning-point! We all knew that the weak dollar is helping over-seas shipments in machinary, etc., but since when is that small segment of the economy going to carry the rest of the economy? Especially now that the BRIC countries are slowing down dramatically.

    And why do these perma-bulls always compare the numbers coming out to “the bottom of the last cycle,” when we are just now entering “the-top” of the coming bottom of this cycle?

  9. BobC commented on Jul 25

    How many of the 740,000 are included in existing inventory? If these aren’t already in those numbers then we’ve got another %15+ in unsold homes on the market. Does anybody know if these are included or not?

  10. Soccer Dad commented on Jul 25

    It’s so crazy looking at that chart and knowing how many families are being affected by it. It’s so easy to watch the skyrocketing foreclosure levels like you’re watching some multi-car accident on the news. But speculators/investors aside losing properties – there are a heck of a lot of families being impacted by this. I’m not sure we’re thinking far enough ahead in terms of the social impacts of much of this. Everyone wants to think it’s just poor people who didn’t ‘deserve to own a home’ or some BS like that. Not at these levels.

    Pretty brutal and only getting worse!

  11. Brad commented on Jul 25

    Is there a similar chart which doesn’t include foreclosure data for speculators? What does this chart look like for only primary residences?

  12. Todd commented on Jul 25

    Kudlow and Caruso-Cabrera are simply unwatchable. It’s cruel and unusual punishment.

    Kudlow was bleating yesterday about some crap saying the home sales number was much better than what was reported. Thanks for being so consistently full of crap, Larry. In your next life, you can come back as a broken clock. It won’t require much of a change.

  13. Hal commented on Jul 25

    it will not bottom till all the homes sold over the past few years to those who could not afford homes are out one way or another, and then cut a bit into the muscle.

    it does seem silly now not to borrow as much as you can and if you had the money for a nice down payment stash it in foreign currency or gold somewhere.

    I see we have a new federal agency over freddie and fannie–we all missed the additional “overhead” thats being added to government.

    Brought to you by the same folks that brought you FEMA.

  14. Joe commented on Jul 25

    On the contrary – Kudlow and Caruso Cabrera are highly watchable.

    Kudlow – b/c listening to someone you often disagree with fundamentally challenges your stance on certain issues, helps pinpoint exactly where you differ, and frankly – keeps you on your toes.

    C-C – She asks sharper questions than Becky and isn’t so difficult on the eyes like Larry.

  15. VJ commented on Jul 25

    So glad this is all CONTAINED.
    .

  16. oh brother commented on Jul 25

    I read an interesting comment on another board: that due to the massive losses incurred because of foreclosures on non-recourse loans, to expect emergency legislation to retroactively change non-recourse to (effectively) recourse.

    So is this a bunch of crazy-talk? Is it even possible? Anyone here have any comment?

  17. Scott MacDonald commented on Jul 25

    If you haven’t seen this before
    http://www.havidol.com/index.php
    it helps explain the driving force behind at least some of these foreclosures in the context of the millions of Americans who sucked the equity out of their homes in a never ending attempt to find fulfillment. This is just a terrific send-up on the all American pastime of conspicuous consumption and big pharma, all in one brilliant package.

  18. Scott MacDonald commented on Jul 25

    If you haven’t seen this before
    http://www.havidol.com/index.php
    it helps explain the driving force behind at least some of these foreclosures in the context of the millions of Americans who sucked the equity out of their homes in a never ending attempt to find fulfillment. This is just a terrific send-up on the all American pastime of conspicuous consumption and big pharma, all in one brilliant package.

  19. Armen Kassabian commented on Jul 26

    This still means that 99%+ of homeowners are NOT in forecclosure.

    Secondly, the housing bill will help a good minority to avoid foreclosure altogether.

    What I want to know is the percentage of mortgages by origination date (i.e. what percent of the mortgages were originated in 1994, 1995, 1996, etc)

    Prices have fallen, but only to 2001-2002 levels so if someone has bought a home before then with a mortgage, they are not underwater and still retain significant equity.

    Even if you are underwater on your house, if you can afford the payments, you will keep making it – what is the alternative?

    Things always look bleakest at the bottom and greatest at the top – We are within 5% of prices bottoming in housing nationwide and in some of the heated markets, the bottom is already in.

  20. VJ commented on Jul 26

    That’s what they said in the Fall of 2007. And the Spring of this year.
    .

Read this next.

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