Foreclosure Recap – Week #51

According to the Los Angeles Tiems Business Section there is a log of 1.7 million homes that are sitting in the wings waiting to hit the foreclosure market. These are homes that have been foreclosed upon to some degree but have not yet made it into the marketplace. Once this backup of homes is actually released into the stream of existing foreclosures into the general public, it is expected to reak havoc upon the Obama administration’s stimulus package. The outlook is not great but it is, according to this article, only a matter of time as to when the lenders actually choose to release these foreclosures or what kind of negative affect it will have on the general public. Obviously, if it is done all at once, it will be devastating.

If you have never heard of Stan Thomas, and in fact even if you have, this is a story that you really ought to read. It will definitely help keep things in perspective for you. He was a real estate developer that often used hundreds of millions of dollars of his own money to get things rolling when he wanted to do something. He was very well off, had plenty of capital and was at the root of many major retail-shopping developments among other high-budget real estate development projects. However, Atlanta Journal Constitution reported in one of its weekly articles that the 55 year old had to place three major projects under bankruptcy protection and narrowly avoided averting a foreclosure in one of his signature development in Atlanta.

The folks at Fannie Mae have given a bit of a holiday present to the folks that are facing foreclosure. On about the 17th of December, the people at Fannie Mae announced that they were suspending foreclosure proceedings on people between December 19 of this year and January 3 of the next year. That is a pretty impressive thing when you consider that, at the moment, there are about 11,000 homes per day going into foreclosure, which would mean that somewhere around 160,000 people will be affected during that two week period. The bad side of that is that the numbers will be larger than in January and February as the homes eventually make their way into the foreclosure arena. Still, for the people that were facing a foreclosure over the holiday season, it is a small blessing to get to spend one more season in the family homestead.

Usually we see the story and the headlines of how the sub prime mortgage loans are the ones causing all the issues and that the numbers are horrendous. However, this story focuses on the opposite side of the tracks and is all about prime mortgages. The recent numbers seem to suggest that 3.6 percent of the foreclosures are from prime as opposed to sub-prime loans. That figure is up nearly 20 percent from the quarter before and is double what it was a year ago. This shows us that even the people who were supposedly stable and had good credit risked having issues with their bills. That is not a great sign for the economy. When you couple this with the fact that, even after having mortgages re-structured, a good amount of them end up in a re-default situation and are put 60 or more days behind schedule. The article hits a sore spot with many but it is an issue that needs to be addressed.

The Cuyahoga County Treasurer in Ohio has announced that he is placing a six-month halt on all the tax foreclosures in his area. While this is not going to totally stop the process of foreclosures in Ohio, it will certainly have an impact on the homes where the folks have simply not been able to make the mortgage payments and pay the real estate taxes as well. The county has the power to foreclose on a property once the taxes have become a year past due. However, under the new announcement they do not plan on filing anything new until at least the summer for single family homes and any cases that happen to be pending will not be placed into a sheriff’s sale. This is great news and the hopes are that it will prove helpful for the folks there are high. Other areas will also be sure to adopt the plan.

From the Associated Press comes this next story with just a little hint of hope to it. The government tax packages and the stimulus packages appear to have driven a fairly significant upsurge in sales. The sales numbers are up 46 percent from the numbers in January. That is still down 10 percent from the same period a year ago but the $8000 dollar tax credit has certainly made an impact that can be seen and felt in the housing numbers. According to the article, the single biggest factor that is going to come into play when deciding if this trend will continue or not is the overall economy its self. Unless there is an economic recovery there is no way that the real estate market will rebound.

More good news, if you believe in or follow the national hardship index sites, the index claims that the total scores have dropped for all twelve-index types in the month of December 2009. According to the article, the last time that the numbers looked this good was back in July 2008, which was right in the middle of the election campaign. What happens is that when people check out and total the foreclosure number, unemployment and gas prices rise among other things, which creates a cross reference against which to make these figures useful. They then transfer this data on to a map called the “Patchwork Map” which will show you, in a glance, how your county fairs against the rest of the country at that particular point it time.

Maryland has had a tough time during this recession and the current real estate crisis. It seems like any indicator number that could be lower that before, was lower. It was a pretty bleak year to put it mildly. However, one of the bright spots in the economy here was rather unexpected. Tourism is up and the numbers clearly seem to be at odds with what the nation is going through. The numbers are interesting to say the least because this story examines Maryland’s foreclosure pitfalls and triumphs. You can see that a good many of the major business players in the state have had significant problems, which caused many to avoid bankruptcy, hurting the state as a whole. While most of the data in the article focus on Prince Georges County, it is still something that should be reviewed because, to many people, the increase in tourism shows a sign that the bottom has been reached and we are starting to climb out of the hole.