Foreclosures 332,292 in October 2009

We have another 8th straight month of foreclosures above 300,000 a month.

U.S. foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc. said.

A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19 percent from a year earlier, Irvine, California-based RealtyTrac said today. One in every 385 households received a filing. The tally fell 3 percent from September, the third consecutive monthly decline.

The worst is still Nevada, followed by California, then Florida. Illinois had an increase in filings, odds are caused by the high unemployment rate.

About 7 million properties likely to be seized by lenders haven’t yet hit the market, Amherst Securities Group Managing Director Laurie Goodman wrote in a Sept. 23 report.

Subject Meta: 

Forum Categories: 

It's completely frustrating.

I said back in April that we needed principal and interest forgiveness in order to address this foreclosure problem. But people that I was some pinko lefty with a bleeding heart - just kidding.

Then you read stuff like this:

Eight months ago, the Obama administration launched a plan to help troubled homeowners avoid foreclosure by providing $75 billion in taxpayer funds to banks and mortgage servicers. The money was intended to help three to four million homeowners by lowering their monthly payments, largely by cutting their interest rates.

The next day, a Yale economist and a colleague penned a New York Times op-ed arguing for a different approach.

Rather than cut interest rates, John D. Geanakoplos and Susan P. Koniak wrote, the government should reduce the overall amount owed on the mortgage -- the principal.

"The plan announced by the White House will not stop foreclosures because it concentrates on reducing interest payments, not reducing principal for those who owe more than their homes are worth. The plan wastes taxpayer money and won't fix the problem," they wrote.

Looks like I wasn't alone. But it doesn't give me joy to know I was right back then because hundreds of thousands of people are experiencing and living hell right now with foreclosure hanging over their head. And as for Obama's program:

As many as 3.4 million homes are expected to enter foreclosure by year's end, with some experts estimating that next year will be even worse. As of Sept. 1, less than two percent of homeowners who received a temporary modification under Obama's plan ended up with a permanent fix. And so far, the plan has already cost taxpayers about $27 billion.

Only five of the 1,711 permanent modifications as of Sept. 1 involved a principal reduction -- in fact, most homeowners with a permanent fix ended up owing even more on their mortgage than they did before the modification.

The Obama Administration went out its way to protect the financial conglomerates at the expense of people with this plan (and many others). This is something I will never forget. Fu*k you Geithner and Summers! - Financial Information for the Rest of Us.

supposedly these are just fluff, no stuff

I've read many reports of people being given the run around, denied paperwork, lost paperwork...

so if it's not really helping anyone, why is it costing U.S. taxpayers at least $50 billion dollars?

I've also read reports claiming it has but only from the W.H.

Under Water

Now comes the second shoe -- slooow recovery and mortgages that still exceed the value of the underlying assets. In the stock market, such a situation would have been cleared quickly with margin calls. But houses are both illiquid and wasting assets. There is now talk of strategic default on mortgages. But the financial elites are whistling past the over-leveraged houses.
Debt forgiveness is a somewhat foreign concept in our economic culture. It conjures up bankruptcy and dire circumstances. Yet the Fed, with its huge balance sheet, could allow a public agency to use the ultra-low cost of funds to create low-interest mortgages, giving homeowners an incentive to stay in their houses. OR we could have a nationl program to rate existing mortgages so that the true LTV ratio would depress the market value of those debts, and allow homeowners to buy back their mortgage at a discount via refinancing. It would also force the financial community to find those mortgages and match them to the properties. This is not debt forgiveness -- it is rather truth-in-mortgage debt, to allow a national reset of LTV ratios and allow homeowners to sell and move on. The banks would find a way to pass most of the cost back to the government, but that is not so different from a home-buyers tax credit or cash-for-junkers. Yes, it would make mortgage originators cautious in the future -- as they should have been in the Greenspan bubble years. It would deflate the debt ro its true value, let us move on and try getting back to a sane economy. Not easy, but possible and maybe a little more just.
Frank T.

Frank T.