Homeowners Becoming Aware Of Foreclosure Options

Homeowners are becoming more aware of options they have available to them to evade having their homes foreclosed upon. In the second quarter of 2010 foreclosures slowed as lenders were slowing foreclosure proceedings on delinquent properties with more aggressive alternatives such as loan modifications and short sales. Short sale investors and REO realtors dealing with short sales have been waiting impatiently for the lenders to step up to the plate with the many short sale offers they have been ignoring.

We have seen this reflected in the foreclosure cleanout business. Though business remains steady, the tempo of contracts is no longer crazy. Property preservation businesses across the US are finally getting time to relax. Many of the banks are increasing the pace of completing their foreclosures to mop up the back logs of distressed properties that were created by foreclosure prevention efforts in 2009.
James J Saccacio, chief executive officer of Realty Trac said, “The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions. The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.” So while property preservation companies have hit a little lull in the business, all indications point to a busy last quarter of 2010 and all of 2011.

The top ten states with the highest foreclosure rates in the first half of 2010 were:
1. Nevada
2. Arizona
3. Florida
4. California
5. Utah
6. Georgia
7. Michigan
8. Idaho
9. Illinois
10. Colorado

What does this all mean for a homeowner in the market to sell? Get the best price the market can bear and get out. It is widely understood throughout the real estate industry that housing prices will keep on dropping for the next 2 years and won’t see any sizable rebound for 5 years. High levels of unemployment, a glut of vacant properties, and the prospect of more distressed properties hitting the market are the reasons for the market pessimism.

The foreclosure trashout business has been a godsend for a lot of unemployed whose jobs will never return. As a company owner or an employee it is one of the few growth industries outside of the medical field.

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August 7th, 2010 | Posted in Foreclosure Cleanouts | 4 Comments

Home Prices Still Dropping

What is becoming increasingly apparent in the real estate market is that home prices have once again begun a downward trend. Last summer had given hope that the market had hit bottom after a slight increase in sales, but this is not the case.

The May S&P Case-Shiller home price report indicated that the U.S. National Home Price Index rose 2 percent in the first quarter of 2010 from the same period a year earlier on a non-seasonally adjusted basis. (S&P says its non-seasonally adjusted data provides a more reliable snapshot of the housing market today.) The month-over-month statistics were less optimistic. Home prices in 20 major U.S. cities dipped 0.5 percent from February to March—the sixth straight monthly decline for this index.

“The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” Standard & Poor’s Index Committee Chairman David Blitzer said in a statement. “In the past several months we have seen some relatively weak reports across many of the markets we cover. Thirteen MSAs and the two Composites saw their prices drop in March over February.”

It is not unusual to see home prices decline in a buyer’s market. The only option available to home owners in this environment is to lower prices to attract buyers. Even with low rates on 30 fixed mortgages and and the unemployment situation seemingly stabilizing, February’s sales increase of 7 percent did nothing to help improve home prices. These forces—in addition to a tax perk from Uncle Sam—helped increase sales of previously-owned homes in March by nearly 7 percent from the previous month. “It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices,” Blitzer said.

Mike Larson of Weiss Research blames the massive inventory of unsold homes for the weakness in prices. “With the supply overhang that we have, it shouldn’t be a surprise that pricing isn’t doing anything spectacular,” he says. The latest report on existing home sales showed that the inventory picture deteriorated in April, with the months’ supply of homes for sale increasing to 8.4 from 8.1 in March. “Sales were up, but inventory was up more, which is something you don’t want to see,” Larson says. “It tells you that there are sellers lurking in the wings, and as long as that is the case, you are not going to see a real firmness in pricing.” The increasing amount of American homeowners facing foreclosures will ensure that prices will have downward pressure for some time.

May still saw an increase in existing home sales as qualified buyers are trying to beat the June 30 deadline for the homebuyer tax credit. It is widely forecast throughout the industry that sales could easily fall through the summer and beyond.
Patrick Newport of IHS Global Insight was quoted as saying, “In our view, the housing glut and foreclosures will drive the national Case-Shiller index down another 6–8%, with prices bottoming in 2011.”

Unsubstantiated rumors coming from Florida are predicting a fall in home prices of thirty to thirty two percent in the next year. Much of the housing market woes are due to the unemployment situation, which does not look to rebound any time soon.

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June 16th, 2010 | Posted in Foreclosure Cleanouts | 25 Comments

More Bad News ~ DuPage County Foreclosures

Though the foreclosure news nationally has improved, there are still five states that contain over 50% of the countries foreclosures. Illinois is one of those five. For more on this the following is an article reprinted by Anna Madrzyk of the Daily Herald on 5/14/2010.

Bucking a national trend, foreclosure filings were up 11 percent in DuPage County for the first quarter of 2010 compared to the same time last year.

In a few towns, the number of filings spiked dramatically during the year-to-year comparison period. Glen Ellyn had 35 foreclosure filings during the first three months of this year, compared to 21 a year earlier – a 67 percent increase. Filings were up 57 percent in Bloomingdale and 48 percent in West Chicago, according to statistics from the Illinois Department of Financial and Professional Regulation.

Brent E. Adams, IDFPR secretary, blames continued high unemployment for the increase in foreclosure filings in DuPage County and the rest of Illinois, at a time when the national foreclosure rate declined slightly.

“The unemployment factor is probably the single (greatest) cause of people falling behind on their mortgage payments,” Adams said.

Overall, DuPage is ranked ninth out of the state’s 102 counties in the number of foreclosure filings during the first quarter of 2010. And there’s more bad news: Foreclosure auctions – the last step in the process – spiked 10.8 percent in DuPage County during the first three months of this year as lenders who had been holding off for the holidays or waiting to see how changes in federal legislation would pan out started unloading properties.

In an effort to help people who may be in danger of losing their homes, the state’s Mortgage Relief Project is hosting a free workshop on Saturday, May 15, in Glendale Heights. The event is from 9 a.m. to 1 p.m. at the Glendale Heights Village Hall, 300 Civic Center Plaza, but “we’ll stay as long as necessary to ensure that everyone is able to see someone,” Adams said.

The Mortgage Relief Project offers struggling homeowners on-site help to rework their mortgages and prevent foreclosure. The Homeowner Protection Act in Illinois gives homeowners a grace period of up to 90 on mortgage foreclosures if they enter housing counseling to get their loan back on track. “Research has shown that homeowners who have the assistance of housing counseling are 60 percent more likely to save their homes,” Adams said.

State law requires lenders to notify homeowners who are at least 30 days late on their mortgages that they have 30 days to get housing counseling. Once they enter housing counseling, homeowners get another 30-day grace period to work out a payment plan.

The Glendale Heights workshop is co-sponsored by State Sen. Carole Pankau, R-Roselle, and State Rep. Franco Coladipietro, R-Bloomingdale. Previous workshops have attracted as many as 400 people, and some started lining up as early as 6:45 a.m.

The Mortgage Relief Project is also planning workshops June 12 in Batavia and July 31 in Bolingbrook. A workshop is tentatively set for August 28 in Wood Dale.

For information or to get help immediately, call the IDFPR’s consumer hotline at (800) 532-8785 or visit www.idfpr.com. A list of approved housing counseling agencies in Illinois is available at www.hud.gov.

I have seen comments on forums that some property preservation companies around the country have slowed down some this year. This is certainly not the case in DuPage County and the Greater Chicago area.

May 25th, 2010 | Posted in Foreclosure Cleanouts | 4 Comments

Greater Chicago Area Foreclosure Updates

New foreclosure updates for DuPage and Will Counties in Illinois and the Greater Chicago area are not hard to predict. Field service businesses will have another busy year. Real estate brokers will work harder to make less.

RealtyTrac Inc. announced Thursday that the number of U.S. homes taken over by banks rose 35 percent in the first quarter from last year. Also, homeowners facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

The first quarter of this year saw more properties seized by the banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005.

“We’re right now on pace to see more than 1 million bank repossessions this year,” said Rick Sharga, a RealtyTrac senior vice president.

The biggest single event that will affect the foreclosure market may be occurring April 30, 2010. That is when the first-time homebuyers tax credit is due to end. Professional real estate members are not sure how this will affect the housing market, but they are looking forward to this day with trepidation. Many believe this will lead to an increase in already falling home prices. Homeowners wishing to sell will only have price drops to encourage buying. It is difficult to imagine any sales increases in such a market.

Barbara Matthopoulos, a spokesperson for the Chicago Association of Realtors said, “We don’t think this credit is going to come back to life anytime soon.”

The expiration of this credit is not a done deal yet. Congress will have a heated debate on this issue until the clock strikes midnight on the 30th. It’s anyone’s guess in this election year how the vote will turn out. Realtors will keep their fingers crossed that this popular program will be hard to vote against.

Realtors are hopeful the tax credit will pass, but realize it will have little affect on the foreclosure mess. The Greater Chicago area will again be overwhelmed by foreclosures in 2010. It will be a happy hunting for all the property preservation companies doing foreclosure cleanouts in DuPage County and the Greater Chicago area.

May 4th, 2010 | Posted in Foreclosure Cleanouts | 11 Comments

Rising Foreclosures in Affluent DuPage County

Job losses triggered the first round of foreclosures in this recessionary real estate market. Compounded by a plethora of “bad paper” written by the mortgage underwriters, the United States has seen month after month of record foreclosures. Though the job market has somewhat stabilized (40% of jobs lost are gone for good), the foreclosure rates are still on the rise.

The foreclosure rates in more affluent areas of the country, like DuPage County in Illinois, are starting to trend up now. Many home buyers that have bought during the housing bubble are finding themselves vastly underwater in their mortgages. Though these owners may still be able to pay their mortgage, they are adopting the business policy that walking away is better than throwing more money at what has become a failed investment.

What all this has created is a huge buyers market that very likely to last for the next five years. There are 3.6 million existing homes and 236,000 new homes for sale in America. Based on the current rate of sales, this breaks down to 8.6 months and 9.2 months of supply.

What must be understood though is these “official” inventory numbers are not the real story. There are so many foreclosures in the “shadow market” that are not being accounted for that have yet to hit the market.

Recent surveys indicate that nearly ten million American home owners are just waiting for conditions to improve before they sell. Many baby boomers retiring or preparing to retire have been caught in this housing mess. Plans to relocate to better climates or out of country have been put on hold do to the fact home prices are down nearly 20% from their peak.

So while the employment situation may be slightly less horrible, and economic indicators are pointing to growth cycle, the housing market is still in for a very rough ride for at least the next few years. If there is an upside to this depressing market is the money that shrewd investors with patience will make through this period. Property preservation companies and foreclosure clean-out companies should also thrive in this environment.

March 28th, 2010 | Posted in Foreclosure Cleanouts | 8 Comments

DuPage County, IL Foreclosures

The need for property preservation companies in the Chicagoland area for 2010 will again be substantial. Foreclosure clean-out businesses can expect another banner year. According to the Illinois Foreclosure Listing Service there will be a stable increase in the foreclosure filings in 2010 with an average of 10-15%. More and more properties with mortgages above 500K will be foreclosed if the economy keeps shrinking. In 2009 the Chicagoland area real estate market certainly had its share of suffering. The most affluent county in Illinois, Du Page County(24.84%), took 2nd place after Kane County(26.23%) as a percent increase in new foreclosure filings compared to 2008.

To their credit the State of Illinois issued the Homeowner Protection Act of Senate Bill 2513, in April of last year. Though the attempt to stem the tide foreclosures was sincere, it had no effect in stalling the foreclosures from rising dramatically. It did however create much frustration in the local courthouses throughout the state.

What was the result of all of this? 2009 saw an increase of new filings that passed over all previous expectations, almost 30% – 60% percent increase compared to 2008.

What does the year 2010 look like? I would like to share an article from NUWIRE Investor. This was published on November 23, 2009 and written by Mike Colpitts.

Foreclosure Forecast For 2010

With housing values still falling in much of nation, the rate of mortgage abandonment has reached nearly 25%. To make matters worse, delinquencies continuing to climb at alarming levels, and given the current pace, Housing Predictor is projecting that there will be more than 17 million foreclosures over the next five years. While foreclosures pose the greatest economic threat, and exert a devastating psychological toll, legislators are dragging their feet on mandating mortgage modifications and banks are tightening their stranglehold on credit. See the following article from Housing Predictor for more on this.

foreclosure forecast

The record volume of foreclosures is growing as first forecast by Housing Predictor in 2006. The epidemic has become the nation’s single most important economic problem as millions of homeowners lose their homes and the crisis makes a widespread damaging impact on the U.S. economy.

The majority of homes now being foreclosed are fixed and adjustable rate conventional mortgages. Massive mortgage losses, however, are being written off slowly by bankers with recently adopted accounting changes. The federal government is incentivizing bankers financially to do short sales and cash for key programs for borrowers, who do not qualify for mortgage modifications.

An increasing number of homeowners, estimated at as many as 1 in 4 current foreclosures, are walking away from properties as a result of falling values. Two separate surveys by Housing Predictor found that nearly 1 in 3 mortgage holders said they would walk away from mortgages if housing prices continue to fall.

In its most recent survey the Mortgage Bankers Association found that 1 in 7 mortgages are now at least one month behind. Due to the rise in homeowner walk-a-ways, lack of forced bank modifications, growing unemployment figures and negative public sentiment Housing Predictor forecasts foreclosures will now top 17-million homes through 2014. More than 4.5-million homes have been foreclosed so far in the unprecedented crisis.

Housing Predictor forecast 10-million foreclosures as recently as June, but the economy and lack of powerful government involvement are worsening the crisis.

A bill in Congress could force bankers to modify mortgages, but the proposal has been bogged down in committee and public outcries have not grown to make the bill a Congressional priority. If passed, the bill could have a major impact on the volume of foreclosures in future years, but since Congress gets its most efficient work done when it operates in emergency mode the economy would have to take a major turn for the worse before lawmakers would see the need to act in an urgent fashion.

The foreclosure crisis is impacting every facet of the U.S. economy. Bankers are hesitant to make loans and holding on to their deposits more closely fearing further weakness. During the height of the real estate boom home values were rising as fast as 3 to 5% a month in some areas of the country. The booming market produced a nearly euphoric hysteria as homeowners talked like they were making more money on a daily basis even if they did not sell their property. Millions took out extended lines of credit and refinanced, essentially borrowing against their homes like piggy-banks.

Now that the asset bubble has deflated, homeowners with a deflating asset are depressed about over-burdened financial obligations. The psychological impact is known as the “wealth effect,” and now that the outlook is not promising millions are looking for a way out.

The crisis will take years to run its course and its taking bankers longer and longer to foreclosure because of moratoriums, new state laws forcing modification mediation in some instances and a back-log of defaults, which are overwhelming bankers.

Lenders have also been holding-off on some foreclosures awaiting additional government assistance or direction. On average each and every foreclosure costs the economy $225,000, which was the average mortgage made during the boom.

More than three years have now passed since Housing Predictor issued its first foreclosure epidemic forecast.

This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.

All this means a greater demand for foreclosure clean-outs in the Chicagoland area in 2010. Again expectations are high for the more affluent counties like DuPage county. For the property preservation companies poised to take advantage of this it should be a very busy year.

March 14th, 2010 | Posted in Foreclosure Cleanouts | 5 Comments