Posts Tagged ‘Foreclosure Rates’

During the second quarter of this year the foreclosure rate in Utah is down in comparison to what it was the previous year. It remains far behind the average national figures where the number of foreclosure units is staggering.

Towards the end of the June 2007 there were only 0.55% properties in Utah suffering the trauma of foreclosures. It meant a drop of 0.74% in comparison to the figures last year during the same quarter. Among the lowest rankers in the foreclosure race Utah ranks 7th and sits comfortably well below the national rate of 1.40%. During the second quarter lenders began to foreclose on 0.65% of USA mortgages – which was an all time record. In Utah the rate was only 0.29%.

Analysts opine that this is primarily due to the relatively strong economic health of the state and also because there has not been much sub-prime activity.

Delinquent loans are those that have dropped behind their payment schedule by 30 days. In this group Utah’s dropped by 3.45 % in the second quarter this year. This was a considerable drop by 3.56% in comparison to the same months in the previous year. Utah’s average was well below the national figure of 5.12%. California, Florida, Nevada and Arizona are the leaders in the slanderous race. There has also been a decline in 34 states. Except for the big four the increase in other states has been minimal. The big four with have been in the doldrums for quite a number of years.

The early years of the new century saw frenetic activity in the housing market. There was a great demand for loans. To satisfy all, risky loans were doled out willy-nilly. But during this time Utah had been relatively flat and staid. It was only from 2004 that some flutter took place in sub-prime lending but it was never much to sing about. The job market was also upbeat. People did not run out of funds and as the economy attracted more job seekers from outside more buyers were available. Another factor behind the sunshine is the relatively high valuation of property. This meant troubled borrowers would get some equity left over even after paying their dues, and start life anew. Of late however property rates have started to fall making it difficult to benefit from a quick sell off.

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The auction firm of Williams & Williams has cause to celebrate – it ranks first in the world for having topped sale of auctioned properties. As foreclosure rates rise more and more house owners have sought escape from troubles via the auction route.

According to Mortgage Bankers Association, the last quarter of 2007 saw foreclosure listings hit an all time high. There are no signs of the tide subsiding says their economist Dough Duncan. RealtyTrac, a name in foreclosure data collection opines that out of 24 major markets in the entire country, 20 showed increases this year compared to 2007.

The numbers are self-explanatory says President of Williams & Williams. He analyzes that a two-tiered real estate system has emerged from the present scenario. On the one side is the traditional approach, which is a luxury confined to a limited few. On the other side of the fence are those who want to clearly know the current rate of their property fast and quick. Their outlook is similar to that of the stock exchange trader or even of a Rockefeller selling a painting. They all go to the auctioneer.
Going to the auction has its advantages. It brings a fair value to the property and does not involve playing the waiting and guessing game of the traditional listing method. In a swift single session buyers determine the real worth of the unit thus saving both on precious time, energy and money. The auction method prevents loss of equity and credit worthiness. Lenders do not have to sit indefinitely on foreclosed properties and lose money.

The auction move is sending shivers down the real estate spine. While speculators and agent hum and haw genuine buyers snap up deals at local auctions in a matter of seconds. Novices who have never experienced auction sales are coming out of it satisfied. Joe Wallman is one such new entrant. He says that now he can clear his debts and live in another affordable house. He is all praise for the professional expediency of William & William and highly recommends them for others in a similar soup.

Williams & Williams is gearing up to meet a double take on their demand since the previous year. This will be their success story for the fourth consecutive year showing a 100% growth since the company was given a facelift in 2003.

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Government officials together with executives from prime mortgage lending firms of Massachusetts are to meet today to discuss avenues of escape for the victims of foreclosures.

Dan O’Connell, the secretary of Housing and Economic Development of the Patrick administration has taken the initiative. He corresponded with executives of top ten mortgage firms in Massachusetts asking them to participate. This is a leak information from a person who has seen the letter but chooses to remain anonymous. The meeting is to be held in the offices of Daniel Crane, the Director of the Office of Consumer Affairs and Business Regulation. The agenda however was not delineated.
Kofi Jones, the spokeswoman of O’Connell, confirmed the news but did not add anything new. According to her O’Connell was not available for comment. She said that a number of players were being invited to sit at the same table and thrash out a solution.
Sub-prime loans, taken out during the last few years, are mainly responsible for the increase in foreclosure filings in Massachusetts. Suddenly the loans have become delinquent.

Borrowers with poor credit history had been awarded the loans and it was very popular at the time of real estate boom because the initial rates were low. It tempted people to own property in costly Massachusetts. The borrowers wrongly estimated their own capacity to continue with repayments. The end of the road came when interests took a sharp swing upwards.

Governor Deval L. Patrick has already suggested enactment of laws to put a check on foreclosure rates. It included a clause that would require the applicants to sign a form relating to the fixed or adjustable rate of interest. Previous to this recent move, the Patrick administration had called a meeting of lenders, activists, and regulators in April. Suggestions were made asking the State to provide the money to refinance loans so that owners do not get thrown out on the streets.

The Banking Commissioner of Massachusetts state, Steven Antonakes had said in April that he had managed to obtain a temporary freeze for 11 property owners in this region and was already working out ways and means to help others. This action followed on the heels of the steps taken by Patrick in instructing members of his administration to go all out to help the hapless victims by directly negotiating with the lenders.

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The latest report is that Utah is not under the foreclosure cloud that has covered the rest of the country. Only 3.05% of outstanding dues were 30 days behind schedule. From last years this is 3.29 % less. Countrywide the rate during the first quarter was up by 4.41% during the same time in 2006. This rise shows that the real estate market is limping due mainly to the stumble in the sub-prime lending market.

The picture is Utah is not grim because it did not succumb to the sub-prime debacle. The economy is strong with the highest employment rate in the country. This has led to a favourable economic climate in comparison to the rest of the country. Only 11 other states have less number of foreclosure listings. The first indication of foreclosure is when the borrower becomes a delinquent one – that is fails to make monthly repayments. Then a notice is served asking the owner to vacate the premises.

According to national statistics 0.58% is facing foreclosures. It means that the rate has gone up by 0.41 since the previous years. Sub-prime loans entering foreclosures surged to an all time peak of 2.43%. On the other hand Utah’s figure dipped to 0.33%. During the same time the previous year the figures was 0.45%. Only 13 other states have foreclosure rates lower than this. The statistics covers government insured and traditional loans. The home-sale market and rate of foreclosure of a state are intertwined. In Utah, homes sell quickly. This means that owners can quickly save themselves from a financial crisis by selling their property at a price that will take care of their loans.

A second opinion is that slowly Utah too is coming under the cloud. Houses priced more than $350,000 are having trouble and concessions are being offered. The other alternative to sit and wait but mortgage defaulters cannot afford the time. But those below $30,000 are sailing through the market easily.

Advocates for consumers opine that strict lending regulations could have forestalled the crisis. Federal Rules should now strongly step in and not remain idle watchers as the economy spins into chaos. On the other side of the fence, lenders are asking the Feds not to interfere beyond the practice of giving advice. But the consumer group is not willing to buy this. They are saying that for the last seven years Federal Reserve has only made small insufficient gestures.

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