Memphis and Foreclosure Statistics Confusion

Posted in Foreclosure, January 9th, 2008 |

Initial year-to-date and numbers of the fourth quarter have registered a gloomy picture for Memphis. It has been shown that foreclosures have been rushing ahead at an alarming pace here but compared to 2006 that was not he case in 2007.

The bankruptcy filings have increased. This is in spite of a related law on bankruptcy passed by the Congress towards the end of 2005. Initially the passing of the law had led to a fall but it soon picked up.

In Shelby County the houses sold at foreclosure auctions during 1st January to 18th December is less than 2% during the same period in 2006. The number rose from 5,753 in 2006 to 5,862 in 2007.

The first foreclosure notices are indicators about the general trend. It is up by 15.5% from 10,154 in 2006 to 11,724 in 2007. The count of first notices is always higher than the auction notices because not all the houses that are foreclosed face the auctioneer’s hammer. The sale of foreclosed units was down by 16% from 1st October to 18th December. During this period there were 1,169 sales in 2007 compared to 1,393 in 2006.

Bankruptcy figures are surprising considering that this region was anointed the bankrupt-capital-of-America. The Congress passed a law in 2005 to rein in bankruptcy filings and this had its impact on Memphis. Filings plunged from 2005 to 2006. In Chapter 7 bankruptcies the debtors have most of their debts wiped out. This is the most forgiving kind of bankruptcy. Its numbers fell by 74% from 10,231 in 2005 to 2,656 in 2006. But from 2006 and 2007 the trend reversed. Each of the prime bankruptcy types, except Chapter 11 saw double-digit percentage increases. Filings of Chapter 7 shot up by 37% from 2,656 to 3,639 during the same period. The filings of Chapter 13 were the highest hopping to over 20% from 10,857 to 12,978.

The preliminary total for the fourth quarter – December 1st to December 18th show that Chapter 7 was up by 30% from 658 in 2006 to 856 in 2007. Chapter 13 was up was 22% from 2,737 in 2006 to 33,41 in the following year. The final numbers for the year 2007 will take some time in coming through. Around the middle of January a comprehensive picture will be obtained. Figures do not vary but what does are the interpretations and analysis.