Thursday, March 11, 2010

Foreclosures Up 6% From Year Ago; Good News Because It's Smallest Increase In Four Years

Media reports are headlining this as good news, but the sad fact is that foreclosures continue at an all too fast clip. The number of foreclosures was up 6% from a year ago, and that's considered good news, even if the overall number is far higher than last year only because it happens to be the lowest rate of increase in four years.
RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years.

More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January

Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

"It's premature to declare victory just yet," said Rick Sharga, a RealtyTrac senior vice president for RealtyTrac. He did, however, allow that, "If this is the beginning of a slowdown in growth rates, that would be a good thing."
It is not only premature to declare victory, but it's worth noting that bank repossessions were also up 6% from a year ago, even if they're down month over month from January.

Foreclosures remain at historic highs, and there's no sign of a change on that front - we may be seeing a slowdown in the numbers, but they're piling up.

That's good news if you happen to be in the market to buy a home since it signals that home prices in certain parts of the country are getting a much needed market correction, but it's bad news if you're trying to sell into this kind of a market.

Moreover, the federal government's homeowners assistance program, which cost $75 billion has managed to help all of 116,000 homeowners. That's a drop in the bucket considering that 308,000 received foreclosure notices in February.

Nevada has the highest foreclosure rates, which corresponds nicely with the state having been one of the epicenters of rampant market speculation and a burst real estate bubble that was unsustainable. Other states with high foreclosure rates are: Arizona, Florida, California, Michigan, Utah, Idaho, Illinois, Georgia and Maryland.

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