Worst on Record: 2.3 Million Homes Faced Foreclosure In 2008
It was no illusion — 2009 really was as bad as it seemed, the worse year on record for foreclosures since the Depression.
Year-end figures from RealtyTrac.com show that 3,157,806 foreclosure filings — default notices, auction sale notices and bank repossessions — were sent out. Because some properties get multiple notices, and because some owners “re-default,” the actual number of homes at risk stood at 2.3 million.
How bad is it? Here’s what RealtyTrac reported:
___ Foreclosure levels in 2008 rose 81 percent over 2007 — and 225 percent over 2006.
___ One in 54 housing units received at least one foreclosure notice during the year.
___ Foreclosure filings were reported on 303,410 U.S. properties in December, up 17 percent from the previous month and up nearly 41 percent from December 2007
___Despite the spike in December, foreclosure activity for the fourth quarter was down nearly 4 percent from the previous quarter.
Huh? Wait a minute. If quarterly filings were DOWN in the fourth quarter doesn’t that mean things are getting better?
Well, actually, no.
The reason fourth quarter numbers were down is that many states have passed foreclosure moratoriums. This means that even if borrowers don’t make their payments they cannot be foreclosed because the courts will not consider such cases.
The problem with moratoriums is that they eventually end. As RealtyTrac explains, “the California law (SB1137), which required lenders to provide written notice of their intent to initiate foreclosure proceedings 30 days prior to issuing a notice of default (NOD), resulted in a reduction of NODs from 44,278 in August to 21,665 in September. Notice of Default filings then surged by 122 percent, to over 42,000, in December. Similar patterns have occurred in other states, such as Massachusetts and Maryland, where similar types of foreclosure prevention legislation has been enacted.”
“State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December,– said James J. Saccacio, chief executive officer of RealtyTrac. “The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.
“Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami. And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners.–
By State
More than 7 percent of Nevada housing units (one in 14) received at least one foreclosure notice in 2008, giving it the nation’s highest state foreclosure rate for the year. A total of 77,693 Nevada properties received a foreclosure filing during the year, an increase of nearly 126 percent from 2007 and an increase of nearly 530 percent from 2006.
Florida registered the nation’s second-highest state foreclosure rate in 2008, with 4.52 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year, and Arizona registered the nation’s third-highest state foreclosure rate, with 4.49 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year.
Other states with Top 10 foreclosure rates for 2008 were California, Colorado, Michigan, Ohio, Georgia, Illinois and New Jersey.
By City
With 9.46 percent of its housing units (one in 11) receiving a foreclosure filing during the year, Stockton, Calif., registered the highest foreclosure rate among the nation’s 100 largest metropolitan areas in 2008. Other California cities in the top 10 were Riverside-San Bernardino at No. 3 (8.02 percent, or one in 12 housing units); Bakersfield and No. 4 (6.17 percent, or one in 16 housing units); and Sacramento at No. 9 (5.20 percent, or one in 19 housing units).
Las Vegas documented the second highest metro foreclosure rate in 2008, with 8.89 percent of its housing units (one in 11) receiving a foreclosure filing during the year.
More than 6 percent of Phoenix housing units (one in 17) received a foreclosure filing during the year, giving the city the fifth highest metro foreclosure rate in 2008.
2009
What will happen this year? Look for more foreclosures and more moratoriums, a race of sorts between bad news and efforts to do something about it.
There MUST be more foreclosures in 2009 because the number of people without jobs is growing — no job, no ability to pay a mortgage regardless of the rate. The Bureau of Labor Statistics reports that as of November 11.1 million people were looking for jobs — and still more were “discouraged” workers not counted in the unemployment totals.
For the full report, please see: FORECLOSURE ACTIVITY INCREASES 81 PERCENT IN 2008
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