Following the remarkably high 60 percent back-end debt-to-income ratio for homeowners whose loans have been made “permanent” via the government’s HAMP program as noted here a couple days ago come more scary statistics on the nation’s housing market.
From Diana Olick’s Loans Going Bad Faster Than the Fixes comes word of how long the foreclosure process is being dragged out:
More than 31 percent of loans that have been delinquent for six months are not yet in foreclosure, while 22.8 percent of loans delinquent for 12 months have not been moved to foreclosure status…
More evidence of banks being hopelessly behind or not wanting to take market prices for REOs comes in California foreclosure starts rise nearly 20% in February from the LA Times:
The number of properties scheduled for foreclosure sale also remained near record levels. However, actual sales of foreclosure properties, whether back to the bank or those sold to third parties, dropped 11.9% in February from the month prior.
Lastly, Paul Jackson at Housing Wire concludes that Housing Recovery is Spelled R-E-O after culling through yesterday’s report from Lender Processing Services:
On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.
With this kind of data piling up, it’s hard to get excited about the prospects for any sort of a near-term recovery. Based on how the banks and the government are handling the problem, we’re probably in for a housing market bottom that will take years to form.
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WAIT UNTIL THE VALUES DROP 30% MORE AND INSURANCE AND TAXES START TO DOUBLE YEAR OVER YEAR………
OH AND ADD THAT RENEG OF THE MORTGAGE INTEREST DEDUCTION………..YEAH THAT WILL HELP……….
Why should I continue paying my mortgage? Possession will be 9/10ths of the law soon.
That would be great for us renters as well, I’ll be seeing you soon with my shotgun to take possession.
This stuff drives me crazy….. It might take decades to recover from this….
I love when people give me food for Christmas, beats plastic objects from China any day.
Folks,the next depression is coming.It’s going to be the greatest depression ever.Gerald Cenlente is right.This is going to be the mother of a depressions.people will be giving away food for christmas!
This article shows what has been a problem all along…People that have not been paying their mortgage had more money in their pockets. So, some felt they are well off again. Spending continued. Going to restaurants, enjoying vacations with extra cash that should have gone to mortgages etc. Once the scheme falls apart, the economy will follow without a question.
What amazes is that there remain any buyers of residential real estate at all. It’s like a giant game of chicken, and both sides (banks not foreclosing and home owners not paying) are going to lose even more.
Who in their right mind can possibly be thinking that the current mess is a “bottom” and that they wouldn’t buy the same value house for 20-40% less next year?
That’s 20-40% potential savings on what will be the largest purchase for many buyers in their lifetime.
Instead of buying into the real estate fiasco here in Cali, I just went out and bought an M3.
414 hp.
I recommend it.
The reason so many banks won’t take back the house is that they will be forced to place value on repossession – current market value. And that would devastate their assets balance sheets, loan ratios, etc. Criminally.
Are these people (squatters) not paying property taxes? Are the counties’ just putting tax liens on the properties and continuing with the false appraised valuations?
This house of cards will fall hard once the levee breaks after the government BS programs delaying the enivitable. Popcorn.
You scared little kids, end of civilization as we know it, chicken littles, fraidy-cats. Its happened before without the worlds greatest depression.
Go back to 1984 – 1988. Look at the foreclosures, non-payers when housing got so bad. It was regional then, it is a little less regional now. Had a friend who lived free for six months and then their friend for 6 after that as there bank told them doing so would keep it from being vandalized or stripped.
The cycle will come agin in another 20 – 30 years as a new generation comes who never learned the lessons and think this time it will be different. These tulips actually have intrinsic value.
The only difference this time is that the congress/Cuomo push amplified the cycle of foolishness, and the opressive regulatory environment have made jobs recovery worse.
Just elect people who know that minimal regulations and laws act like lubrication and then additional regulations reduce jobs, and every dollar of government spending reduces private spending by 1.1 dollars.
The only way out will be through massive inflation.
By delaying processing mortgages, the banks may be acting by deliberate design… if they processed all forclosures they would be bankrupt, so they don’t do that calculation and they tell uncle Bernanke, if we calculate it that way we only get red numbers and Bernanke likely said, Have faith, fine fellows, and drag ye feet, as the inflation monster will be unleashed, as soon as I can organize it so that China takes the blame.