RealtyStore Foreclosure Blog

It is already well known that the American economy and real estate industry are floundering, largely as a result of declines in American real estate. For the most part, however, commercial property has been considered safe. At the top of the U.S.’s list for foreclosure rate hikes lies Las Vegas, where news writers are now reporting an impact on commercial real estate. The bulk of commercial closures in Las Vegas, unlike what Realty Store recently reported on New York City’s commercial buildings, are not related to actual commercial foreclosure, but are more likely to be related to the economic slump, job loss, and business owners moving out of town as a result of losing their homes to foreclosure.

By J.W. ELPHINSTONE

“Las Vegas has the distinction of having one of the worst housing markets in the country. But now that slump, along with job losses and high fuel prices, is infecting Sin City’s commercial real estate market, sending vacancies in all sectors sky high.

“The city’s commercial sectors clocked the second-worst increase in vacancies in the past year, according to Marcus & Millichap Real Estate Investment Services, following only Orange County, Calif., where the main problem is too many empty offices.

“The first domino for commercial real estate was the loss of construction jobs. The second domino was the effect of job losses, foreclosures and lost home equity on the local economy. And the third domino was the national economic slowdown,” said Hessam Nadji, managing director of Marcus & Millichap.”

Read the full article, “Real Estate Close-Up: Las Vegas.”
Copyright 2008, El Paso Times

In a Press Release issued July 7, 2008 by Radar Logic, Inc., it would seem that primary U.S. cities are still experiencing a decline in housing market prices. The company, “a technology-driven data and analytics business that produces a daily spot price for residential real estate in major U.S. metropolitan areas,” calculates its findings based on actual market data, using “proprietary and transparent algorithms.” Their data reflects a continued slump in the housing market.

“For April 2008, evidence suggests that the broad housing slump continued as consumers showed persistent lack of confidence and difficulty in financing home purchases.

“Of the 25 Metropolitan Statistical Areas (MSAs) examined, one market showed a price per square foot (PPSF) increase, one was neutral, and 23 showed declines on a year-over-year basis; however, nine MSAs showed PPSF increases from March to April. Consistent with seasonal expectations, 21 MSAs showed a transaction count increase from March to April 2008.”

As bad as this may sound for the economy, this is actually GREAT news for foreclosure investors, first time home buyers, and anyone looking to buy a home at a huge discount any time between now and the next 6-12 months. So start your search TODAY, and get ready to make your move soon.

Read the Full Release: “RPX Monthly Housing Report.”
Copyright 2008, Radar Logic, Inc.

That age-old question is coming up again: rent versus buy? The foreclosure market has been growing considerably in recent years, as the rate of default and supply has increased, causing housing prices to fall. If you have good credit and a reasonable down payment saved up, you might be asking yourself if you should buy. The American Bankers Association offers a few tips to help.

Money and Business
June 18, 2008

The American Bankers Association suggests that consumers ask themselves the following five questions when deciding whether to buy or rent property:

1. What will monthly costs be, and can I afford the payments? Keeping mortgage payments under 30 percent of your gross monthly income is a good rule of thumb. If you can’t keep mortgage payments to less than that percentage, you may be better off renting for awhile.

2. What other debt do I have? Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of gross monthly income.

Read the full article, “To Buy or Rent? 5 Questions to Ask Yourself,” on the USN website.
Copyright 2008, U.S. News and World Report

Consumers are apparently optimistic about the future of the national real estate economy, according to a new survey conducted by Housing Predictor. Nearly 1 out of 2 polled say they believe the national real estate economy will improve within the next two years.

The online survey serves to show that despite the turmoil in the nation’s real estate markets, triggered by the credit crisis most believe conditions will improve in a short time span. Only 28% of all respondents said they believe it will take five years or longer for credit market conditions to improve the housing market.

An unprecedented epidemic of foreclosures has led to lower home prices in the over-whelming majority of the country. As many as 1 out of 3 homes in some especially hard hit areas listed for sale are foreclosures, damaging communities and housing values.

A majority of economists recently surveyed say the nation is either in a recession or at least close to experiencing one. Rising gasoline prices have triggered the highest food inflation the country has experienced since 1992, which was during the last major real estate recession.

Congress is dealing with a series of proposals to assist some homeowners threatened with foreclosure. But more than 3-million homeowners are now behind on their mortgage payments and are threatened with foreclosure. A Housing Predictor survey in March found that the over-whelming majority of respondents believe Congress will fail in its attempts to solve the national real estate crisis. Foreclosures are forecast to increase to total more than 5.6-million units through 2011.

Some 25% polled said they believe things would improve in a year or less. Housing Predictor regularly surveys consumers on real estate related issues, and provides more than 250 local housing market forecasts in all 50 U.S. states. The data on which forecasts are issued are independently gathered by researchers from thousands of sources throughout the nation. Markets are constantly monitored by researchers to keep visitors up to date on changing market conditions.

Find out more about the latest Housing Predictor poll, check market forecasts and search real estate listings at http://www.housingpredictor.com

A new foreclosure Bill is expected to pass this week, granting home owners more rights and making it harder for banks to reclaim their assets when owners default on their mortgages. This is great news for homeowners in distress, but not necessarily for savvy buyers and investors looking for golden opportunities in a troubled housing market.

But the bigger issue is whether legislation is really the right move.

Given that most Americans have more debt than they can ever expect to repay, why wouldn’t the Government step in there too? Most importantly, how might this legislation affect our economy?

Keep these important questions in mind as you learn more about the foreclosure Bill discussed in the following New York Times article, including the points that have been highlighted below.

By MANNY FERNANDEZ
Published: June 22, 2008

“The bill that Gov. David A. Paterson and leaders of the State Legislature announced last week to address the subprime lending and foreclosure crisis was, for Albany, that rarest of things — an effective compromise.

“The legislation will change how subprime loans are made and regulated, and will alter the way many foreclosures are handled by the courts, establishing protections for homeowners that had not been in place.

“For housing advocates and some Assembly Democrats, the bill could have been stronger. Their push for a statewide one-year moratorium on foreclosures ultimately failed. For the state’s banking and mortgage broker industries, it could have been weaker. They argued that New York has seen fewer foreclosure filings than other states largely because of regulations already in place.

“But the end product — a bill expected to pass on Monday, the last day of the legislative session — appears to have struck a balance that satisfies nearly all sides, though housing advocates question the extent to which it will help thousands of homeowners most in need: Those going through foreclosures right now.”

Read the Full Article:
In Confronting the Foreclosure Crisis, a Bill Strikes a Balance
Copyright 2008 New York Times

Santa Barbara, CA June 23, 2008 — RealtyStore (www.realtystore.com) recorded nearly 16,500 Notices of Default (NOD’s) in northern Illinois counties for Q1 in 2008. An NOD is filed by the lending institution, when a homeowner falls behind on mortgage payments. NOD’s provide important information about which home owners have home loans they cannot afford.

A sample of 10 northern counties (Champaign, Cook, DeKalb, DuPage, Kane, Kendall, Lake, McHenry, Rock Island, and Winnebago) shows a 45% increase in NOD’s since January 1, 2007. DuPage County, spanning approximately 352,000 homes and housing nearly 0.31% of the U.S. population, saw a 77% increase in NOD’s. Lake County also saw a drastic foreclosure hike of 78%. Between the two counties, Lake County was impacted most drastically, as more than half of its NOD’s occurred during the last six months (October 2007 through March 2008). Cook County, the second most populous county in the United States (over 5.2 million people), fared far better, with a 37% increase from Q1 2007 and an 11% increase in six months.

Two northern counties experienced a decrease in NOD’s during the past six months, though the decrease was minor. Champaign County saw a 4% drop in foreclosure filings. The other, small County of DeKalb has few NOD’s compared to other northern counties, so a 5% decrease in foreclosure in that area can be a difference of one home owner clearing the default. At a glance from Q1 2007 to Q1 2008, both counties continue to experience a rise in pre-foreclosure property.

Overall, northern Illinois has seen its NOD rate almost double in the last 15 months. “As the U.S. economy continues to deteriorate, the latest wave of ARM’s (adjustable rate mortgages) combined with rising unemployment, inflated oil prices, and the falling value of the U.S. Dollar, it is plausible that the foreclosure problem will continue to get worse,” stated Tim Chin, RealtyStore CEO. “If you are thinking about buying foreclosure property, I always recommend working with an experienced real estate professional for advice on whether to buy now or wait on the sidelines a little longer.”

About RealtyStore.com: Founded in 2005, RealtyStore.com is the fastest growing, most trusted provider of foreclosure listings and information in the nation with over 1 million pre-foreclosure, foreclosure auction, bank-owned, and tax sale property listings. Collected from hundreds of public and private sources, RealtyStore’s proprietary database includes extensive property characteristics (including pictures and maps), default and tax information, comparable home values, and neighborhood demographics information. For more information, visit http://www.realtystore.com

An alliance of mortgagors known as “Hope Now” presents new lender guidelines aimed at helping consumers with their foreclosure problems by making it easier for borrowers to communicate with their lenders, urging negotiation between banks and borrowers, encouraging short sales, strengthening documenting methods, and even going as far as to suggest that banks simply “forgive” secondary lines of credit.

“Hope Now members agree to more streamlined, uniform approach to foreclosure prevention. But community advocates say it isn’t enough.”

By Les Christie
June 17, 2008

“NEW YORK (CNNMoney.com) — Life may get a little bit easier for troubled borrowers.

“Hope Now, the alliance of lenders, mortgage servicers, investors and community advocacy groups put together to fight the foreclosure epidemic, announced new guidelines Tuesday that should help speed up the process of helping borrowers who are trying to hang onto their homes.

“‘It may not be a panacea, but it will help a lot of people and lay a strong foundation for recovery,’ said Jonathan Kempner, president and CEO of the Mortgage Bankers Association.”

Read More of this article, “Housing Rescue Group Steps up Efforts,” at CNNMoney.com.
Copyright 2008 CNN

Home owners and real estate professionals are not the only ones hurting while the real estate market plummets to new lows and foreclosure rates skyrocket. Renters are also feeling the brunt of the problem. Many of them, such as Las Vegas’ Marketa Johnson, are being evicted as property changes hands, whether they have a history of good tenancy or not.

One of the best ways for a seller to make money investing in real estate is to rent out the acquired property for an amount that equals or surpasses the monthly mortgage, property taxes, and other related expenses. Unfortunately for renters, inflating ARM’s (adjustable rate mortgages) are making it hard for investors who took the property management route to make monthly payments without raising rents, ultimately sending them into foreclosure.

By Patrick Rucke:
Edited by John O’Callaghan
June 15, 2008

“LAS VEGAS (Reuters) - The day before her husband was deployed to the Middle East by the U.S. Air Force, Marketa Johnson got word that her family would be evicted from their rented home.

“It did not matter that the Johnsons had never missed a rent payment and had signed a two-year lease. The property owner was facing foreclosure and so Johnson simply packed her bags.

“Almost one in five recent foreclosures have been against mortgage borrowers who did not live in the home, according to a snapshot from the Mortgage Bankers Association.”

Full story, “Renters, Soldiers Feeling Foreclosure Pain.”
Copyright 2008, Reuters

Weakened by the worst credit crisis in the nation’s history, the Top 25 Housing Predictor real estate markets in 2008 are showing signs of erosion. The once top rated market is beginning to run out of gas and has fallen from its #1 position and many of the other markets have changed.

Housing Predictor annually issues its Top 25 markets forecast the beginning of the year, and updates the forecast at midyear. But the update is being made earlier than usual this year as a result of a national housing market climate that has seen sales slow even more than forecasters expected. The ripple effect of tighter mortgage standards and increasing inventories of homes and condos on the market for sale are to blame.

Record high levels of foreclosures also account for drastic changes in many housing markets. Many markets have already deflated more than 50% in value from the boom’s peak. The Top 25 markets have the highest likelihood of hitting their forecast appreciation by year’s end, despite a growing belief that the economy is in recession and the majority of housing markets throughout the country are suffering from real estate depressions.

Housing Predictor forecasts more than 250 local housing market futures in all 50 U.S. states and provides independent unbiased analysis on market conditions. The top markets are scattered all over the U.S. Only four states have placed three markets on the list. Utah, Mississippi, Texas, New York, Oklahoma, Idaho and North Dakota placed markets on the leading list among other states.

Conservative North Dakota with one of the strongest statewide economies nationally, and the least subprime mortgage activity in the country, placed three cities on the list. However, neighboring South Dakota, damaged more substantially by the subprime mess failed to place any markets in the top.

Housing Predictor also provides breaking real estate news. Find your market forecast, search new listings and foreclosures at http://www.housingpredictor.com

You might never have considered who owns the skyscrapers in New York City, but a report by the AFP issued this morning would indicate that many of them are owned by big businesses. Just like the rest of the Nation, entrepreneurial companies invested in real estate during the real estate boom. Not surprisingly, some of those investors are finding themselves having trouble hanging on to the city giants. The end result is that Big Apple skyscrapers are being resold to local and foreign investors to alleviate ever-increasing debts as the real estate market plummets and the American economy continues to struggle.

“NEW YORK (AFP) — The iconic Chrysler and Flatiron skycrapers may soon join New York’s GM Building as landmarks sold in part to Arab or European investors as the weak dollar spurs property grabs in the Big Apple, reports said Friday.

“The 50-story General Motors Building, constructed in 1968 and which includes the Apple Store on Fifth Avenue, has already been sold — for a record-breaking 2.8 billion dollars — to US real estate firm Boston Properties, backed by investors from Dubai, Kuwait and Qatar.

“The deal, concluded on Tuesday, makes the GM Building the most expensive skyscraper in the United States, according to several reports.

“The seller, Macklowe Properties, had been mired in debt after acquiring seven major New York properties last year for seven billion dollars near the height of the real estate boom, before the subsequent real estate and credit crises.”

“It goes to show just how deeply American real estate is being impacted by falling property prices,” said Tim Chin, RealtyStore CEO.

Full Story, “Treasured New York Skyscrapers may be Sold to Foreign Funds”
Copyright 2008 AFP

The current economic downturn is causing many individuals who were once secure in their investments to take a second look at where, when, and how they invest their money, sending stock market prices down hill and adding fuel to the fire. In a recent video interview released by CBS News, SmartMoney.com Editor Stephanie AuWerter suggests a few tips to help steer those citizens in a direction oriented towards success.

June 9, 2008

“As oil prices continue to rise and people continue to foreclose on their homes, many are wondering just how bad the economy can get. However, ‘For long term investors, it really is worth noting that this too shall pass,’ says AuWerter. Try to keep market changes in perspective. While the market may be down right now, in the long run, the stock market goes up.

“To minimize your losses, use dollar cost averaging. While many people rush to sell when the market is falling, AuWerter suggests that this isn’t the best idea. ‘You’re really locking in your losses,’ she says. Your best bet is to make regular investments over time, which forces you to buy more shares when the market is down and less when it’s rising. The best way to do this? Invest in your company’s 401k.”

View the Video and Full Story Here

Copyright 2008 MMVIII, CBS Interactive Inc. All Rights Reserved.

RealtyStore’s vision has always centered around educating the public about foreclosures and teaching consumers how to save money by purchasing foreclosure property. In the wake of the “foreclosure crisis,” as it is now widely becoming known, becoming knowledgeable on the subject is becoming ever more popular. Ralph Roberts, author of certain real estate related texts in the “… for Dummies” series is scheduled to release his latest text, “Foreclosure Myths: 77 Secrets to Saving You Thousands on Distressed Properties,” this fall. Publishers say it will not be the last.

June 9, 2008
Joanne Kaufman reports:

“Last week, when Mr. McMahon told his tale of woe on “Larry King Live,” it may have been a boon to publishers that aim at the foreclosure market. Among them is Wiley, which puts out the “for Dummies” series and introduced “Home Staging for Dummies” in April.

“‘We brought that book to market in eight months, and our usual time period is a year,’ said Diane Steele, a vice president at Wiley. Also on the fast track is a new edition of “Property Management for Dummies,” which will come out in August.

“But the pendulum has not swung entirely in one direction, since Wiley and other publishers also seek to serve people who have been sitting on the real estate sidelines.

“‘There will be new landlords,’ Ms. Steele said, ‘because when people get over the fear curve and recognize that properties are affordable, we think that more and more of them will be going into real estate investing.’”

Understanding the home owner in default’s mind set and potential denial is key to helping them through a difficult time and to getting yourself a reasonably good deal.

“In 1979, Mr. Roberts said, he could not keep up with the payments on his three-bedroom ranch in Troy, Mich., a Detroit suburb, and lost his home.

“‘I did all the wrong stuff,’ he said. ‘I didn’t tell my family. I didn’t go to a rich uncle. I didn’t get help. I just let the process happen.’”

For more information about buying a property in pre-foreclosure, please take a look at our online Foreclosure Tutorial.

Full Story, “A Shift in Real Estate Books”.
Copyright 2008 New York Times

Proof that hindsight is 20-20, a three-page report issued Tuesday, June 10, 2008, by the Washington Post made it clear that HUD is currently in the spotlight, given how many of their borrowers have entered or lost their homes to foreclosure. Not only are real estate professionals looking in their direction and shaking their heads, but now Congress is expected to consider changing HUD’s regulatory responsibilities, as well.

Carol D. Leonnig
Washington Post Staff Writer

“In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending.

“Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more “affordable” loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.

“Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.

[…]

“Congress is expected to vote before its Fourth of July recess on legislation that would strip HUD of its regulatory authority over Fannie and Freddie and give it to a stronger regulator.

“Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt.

[…]

“HUD officials dispute allegations that the agency encouraged abusive lending and sloppy underwriting standards that became the hallmark of the subprime industry. Spokesman Brian Sullivan said the agency and Congress wanted to increase homeownership among underserved families and could not have predicted that subprime lending would dominate the market so quickly.”

Read the full story, How HUD Mortgage Policy Fed The Crisis: Subprime Loans Labeled ‘Affordable’.
Copyright 2008, Washington Post

Mortgage and Trust Deed lenders are growing desperate to reclaim their assets on loans in default. A recent Associated Press article explains how the current market situation, however bad it may seem, is opening up a world of opportunity for qualified buyers looking to save money on a home investment through auctions and “Short Sales.”

June 6, 2008

By ALAN ZIBEL
AP Business Writer

“A record of almost 3 million American homeowners were at least one month late on their mortgages in the first quarter, the Mortgage Bankers Association said Thursday. And another record of almost 450,000 had entered the final stage of foreclosure.

“Wherever the turning point, buyers are finding that the deep discounts on bank-owned homes can be a fabulous opportunity, but also a source of anguish. Sally Zuniga, 29, and her husband have been looking to buy their first home outside Sacramento and have been unsuccessful so far due to the intense competition.

[...]

Jeff Dolfinger, a broker in Poughkeepsie N.Y., who specializes in managing and selling foreclosed properties, estimates that about 90 percent of those homes in his market are being bought by investors.

“‘To them, this is the best real estate market ever,’ he said. ‘They’ll wait for this turmoil to end and they’ll put the properties right back on the market again.’

[...]

“A quick way for a lender to dispose of properties is through an auction. However, lenders lose an average of 56 percent of a property’s value through auctions, compared with a 40 percent loss for ordinary sales, according to a report last month by Fitch Ratings.

“Nevertheless, the report found that the use of auctions has been rising as lenders try to cope with rising inventory.”

View the full story, Lenders Slash Prices on Foreclosed Houses as Numbers Surge, on the Associated Press web site. Content is Copyright 2008 by The Associated Press

As we all know, timing is everything, especially in the real estate market. The question on every home buyer and investor’s mind is - should I invest in a home today, in a month, or a year from now? Predicting the future is not possible. However, we can make pretty accurate assumptions. The Opinion selection of the New York Times offers important housing market statistics and takes a quick glimpse into the past, present and future of the US mortgage crisis.

New York Times - OPINION
May 19, 2008

“In responding to the subprime mortgage crisis, most Congressional Republicans and many Bush administration officials apparently believe they have time on their side. They are wrong.

“The housing bust is feeding on itself: price declines provoke foreclosures, which provoke more price declines. And the problem is not limited to subprime mortgages. There is an entirely different category of risky loans whose impact has yet to be felt — loans made to creditworthy borrowers but with tricky terms and interest rates that will start climbing next year.

“Yet the Senate Banking Committee goes on talking. It has failed as yet to produce a bill to aid borrowers at risk of foreclosure, with the panel’s ranking Republican, Richard Shelby of Alabama, raising objections. In the House, a foreclosure aid measure passed recently, but with the support of only 39 Republicans. The White House has yet to articulate a coherent way forward, sowing confusion and delay.

“The fits and starts are harmful. The housing bust is in the downward spiral of price declines and foreclosures. Single-family-home prices dropped 7.6 percent from the first quarter of 2007 through the first quarter of 2008, the largest year-over-year decline since the National Association of Realtors began reporting prices in 1982. Conservatively estimated, 2.2 million homes will enter foreclosure this year. An additional nine million homeowners — those with zero or negative equity — are considered at high risk of default because they have no cushion if recession or inflation, or both, make it impossible for them to keep current on their mortgages.

“That is because a category of risky adjustable-rate loans — dubbed Alt-A, for alternative to grade-A prime loans — is scheduled to reset to higher payments starting in 2009, with losses mounting into 2010 and 2011. Distinct from subprime loans, Alt-A loans were made to generally creditworthy borrowers, but often without verification of income or assets and on tricky terms, including the option to pay only the interest due each month. Some loans allow borrowers to pay even less than the interest due monthly, and add the unpaid portion to the loan balance. Every payment increases the amount owed.”

You can read more at NY Times - Teeing up the Next Mortgage Bust
Copyright 2008 by the New York Times

Proof that the foreclosure crisis is affecting not just the lower and middle classes, James R. Hagerty and Glenn R. Simpson of the “Wall Street Journal” bring you the scoop on Ed McMahon’s recent announcement regarding his mansion’s pending foreclosure.

By JAMES R. HAGERTY and GLENN R. SIMPSON
June 4, 2008; Page A3

“Ed McMahon, the longtime sidekick to U.S. talk show host Johnny Carson, has blamed the possible foreclosure of his Beverly Hills mansion on a “perfect storm” of problems facing Americans caught in the housing downturn.

“It’s a combination, it’s like a perfect storm,” McMahon, 85, told CNN talk show host Larry King in an interview on Thursday night. “Economy problems… We’ve had this house on the market for two years.”

“McMahon, most famous for his “Heeeeeeeeere’s Johnny” introduction to “The Tonight Show” for 30 years, said he was $644,000 in arrears on the mortgage for the six bed, five bathroom house in Beverly Hills, which is listed for sale at $5.75 million.”

Read more at The Wall Street Journal - Ed McMahon May Lose Beverly Hills Home

Copyright 2008 by the Wall Street Journal

Former heavyweight boxing champion, Evander Holyfield, recently joined the ever-growing list of celebrity foreclosures. Holyfield appears to be having financial problems. The home, whose estimated value is around $10 million, is going to be auctioned off to the highest bidder on July 1, 2008.

Interested in purchasing Evander Holyfield’s home? If so, you can get the process started in the RealtyStore Home Loan center.

Note: You’ll need around $10 million - That’s “7″ zeros!

NY Times writer, Michael M. Grynbaum, says 10% of all U.S. homeowners could be facing trouble with their mortgages.

“Nearly 1 in 10 American homeowners with a mortgage faced foreclosure or fell behind in their payments in the first three months of the year, according to a report released Thursday, a figure that offers a look into the toll caused by the collapse of the housing market.

“The period from January to March marked the worst quarter for American homeowners in nearly a quarter-century, according to a widely watched report put out by the Mortgage Bankers Association, a trade group.

“Both the rate of new foreclosures and late payments surged to the highest levels since 1979. (The delinquency rate includes Americans who are more than a month past due on their home loans.)

“A breakdown of the statistics showed problems at nearly every level of the mortgage industry.”

You can read more at NY Times - Nearly 1 in 10 Homeowners Face Loan Problems

CNNMoney.com writer, Chris Isidor, talks about the latest static - over 1 million home foreclosures reported in the first quarter of 2008. We will see nationwide foreclosure rates increase before they decrease, making 2008 a great time for home buyers to invest or purchase a new home.

More than one million homes are now in foreclosure, the highest rate ever recorded, according to a trade group which warned Thursday that the crisis will continue to worsen.

“The Mortgage Bankers Association’s first quarter report showed that a record 2.5% of all home loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That’s up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007.

“The report also showed that 448,000 homes, or about 1% of loans being serviced, began the foreclosure process during the first quarter. That’s up from about 382,000 homes, or 0.83%, that entered foreclosure in the last three months of 2007.”

You can read more at CNN - Homes in Foreclosure Tops 1 Million

Santa Barbara, CA June 5, 2008 — RealtyStore (www.realtystore.com), the nation’s leading provider of foreclosure listings, released its quarterly Arizona Foreclosure Report.

Declining home values, mounting inventory and slowing residential construction have led to skyrocketing foreclosure rates in Arizona. For Q1 2008, 1 out of every 80 Arizona households received an auction notice, almost 3 times the national average. RealtyStore.com recorded 23,607 auction notices statewide for Q1 2008, representing a 46% increase from Q4 2007 and a 304% jump over Q1 2007. An auction notice, also known as a Notice of Trustee Sale (NTS) or Notice of Foreclosure Sale (NFS), is filed by the lending institution when a homeowner fails to cure their default. This is the second stage of foreclosure where the lender formally records its intent to sell the property through a public auction.

“Over the past two years, Phoenix home values have dropped 25% while foreclosures have increased six-fold. For-sale signs and vacant storefronts are a common sight,” said Tim Chin, CEO of RealtyStore. “Stimulus plans proposed by Congress will not outpace the damage caused by plummeting home values in an economy heavily reliant on residential growth. Arizona housing prices will continue to slide through 2008 and will only begin to stabilize during the second half of 2009.”

Maricopa County, the nation’s 4th most populous county and home to Arizona’s largest city and capital Phoenix, started off the first quarter with 17,214 auction notices. This was a 350% spike from the auction notices recorded in Q1 of last year. With over $600 billion worth of ARMs due to reset this year, many Arizona homeowners will find their payments soaring by as much as 100%. Distressed borrowers unable to cope with payment increases will enter the foreclosure process at an increasing rate. Home values will be further suppressed by the glut of bargain-priced foreclosures flooding the Arizona home sale market. Unfortunately, the bottom of the Arizona housing market is yet to come; as more and more homeowners are simply walking away from homes that are now worth less than what they owe to the bank.

RealtyStore (www.realtystore.com), the nation’s leading provider of foreclosure listings, released its quarterly Arizona Foreclosure Report. Auction notices in Arizona have jumped 304% since Q1 2007 due to declining home values and residential construction activity. Many homeowners are simply walking away from their homes that are now worth less than what they owe to the bank.

Peter Y. Hong (LATimes) serves up hors d’oeuvres, fine wine and a little bit of foreclosure news. Hong explains how the foreclosure wave has moved past the guarded gates and into Napa Valley’s exquisite high-end real estate housing market.

Buyers last week of a Spanish-style, 3,220-square-foot house on a cul-de-sac here got a bargain: $1 million for a hilltop home in Northern California’s wine country, with views to San Francisco in the distance.

Two years ago, the same property sold for $1.4 million. But after the lender foreclosed on the property, the home was deeply discounted. Real estate agent Michael Snider, who handled the sale, thinks more such sales are on the way.

You can read more on the Napa Valley foreclosure problem at LATIMES.com

A majority of Americans have lost confidence in mortgage lenders and banks as a result of the credit crisis, according to a new survey by Housing Predictor.

The poll indicates that the majority of those surveyed have lost trust in the nation’s banks and mortgage lenders. Mortgage companies and lenders went on a free-wheeling lending spree for years making mortgages to even those at the highest risk of not re-paying triggering the subprime crisis.

The free wheeling days of mortgage lending ended in the worst epidemic of foreclosures in the nation’s history. Already, 2.4-million properties have been foreclosed and another 3.2 million foreclosures are forecast by Housing Predictor through 2011.

Some 56 percent of those surveyed said they have “lost confidence” in mortgage lenders as a result. The remaining 44% said they had not lost confidence in lenders. The online poll was conducted over a three week period, during which time Congress has been working on a plan to help many more homeowners under the threat of foreclosure.

Upward changing adjustable rate mortgages calculated to increase to higher interest rates, resulting in higher mortgage payments and a nearly record setting deflationary real estate market cycle has resulted in slower home sales in nearly all housing markets.

Housing Predictor forecasts more than 250 local markets in all 50 states and keeps visitors to its web site up to date on real estate conditions throughout the nation.
Housing Predictor regularly surveys visitors on real estate related issues in its widely monitored Predictor Polls, which have become increasingly popular as a result of the troubled housing market in the over-whelming majority of the nation.

The independent information driven web site regularly tracks housing markets with a staff of researchers and journalists to keep up to date on real estate market conditions, and reports on major issues related to housing markets throughout the country.

Read the report on the latest survey, other real estate news and search foreclosures and other real estate listings at http://www.housingpredictor.com

Be careful homeowners, do not be one of the victims in Florida, specifically Tampa foreclosure scams.

Foreclosure Scams Lurking In Your Neighborhood

Delinquent homeowners looking to break free from default notices are getting tricked by brokers promising to save them from foreclosure, only to make off with thousands in fees or what home equity is left.

Take rent-to-buy scams. In cases like these, a fraudulent rescue company convinces a homeowner to sign over the title while building equity as a renter. The homeowner avoids foreclosure but risks being evicted by the very firm that promised to save his home.

The situation is bad enough in Florida, one of the nation’s foreclosure capitals, that State Attorney General Bill McCollum has filed suit against National Foreclosure Management, a mediation company, for allegedly defrauding troubled homeowners; fraudulent rescue companies in Illinois have been increasingly penalized, while in Massachusetts the for-profit practice of foreclosure rescue transactions has been banned.

With rising foreclosures threatening homeowners, rescue brokers prey on subprime or adjustable rate borrowers because many facing foreclosure are overextended and desperately looking for a way out of their mortgages.

Bad-News Bailouts

Low-level schemes involve those who pose as mediation specialists or counselors promising to rescue homes from foreclosure. Naturally, they work for a fee. While they might not charge an excessive amount of money, between $300 and $6,670, according to the Illinois state’s attorney’s office, the Federal Trade Commission says that once homeowners pay that first check, these so-called specialists disappear.

It hurts to lose a few hundred dollars, or even a thousand, but the wilier schemes involve surrendering the title.

The most basic involves pushing on homeowners’ phony documents that appear to be a new mortgage application. These are known as rescue loans which, if correctly represented, give a homeowner the cash to stave off a foreclosure. Instead, these false documents turn over the title.

A more sophisticated version of this scam involves a rent-to-buy provision. Here, a mediator matches a distressed homeowner with a management company that takes over the property while giving the homeowner the ability to become a long-term renter, with his rent paying down the mortgage.

The premise here is that the management company has great credit and can refinance at a better rate, which they will do for a fee. This arrangement is attractive to a delinquent homeowner because the months-long foreclosure process is a black mark on a credit report.

Reuters writer, Joanne Morrison, reviews the US single-home market using short term economic indicators to predict future trends for our housing market.

Prices of U.S. single-family homes plunged a record 14.4 percent in March from a year earlier, while consumer confidence slumped to its lowest in 16 years in May as gasoline prices surged.

The Standard & Poor’s/Case Shiller composite index of 20 metropolitan areas released on Tuesday showed prices of previously owned homes fell 2.2 percent in March, deepening their year-on-year decline.

Separately, the Conference Board said its consumer confidence index slumped to 57.2 this month from 62.8 in April as rising gasoline costs and falling home prices made Americans increasingly nervous both about current conditions and the future.

“In terms of prognosis, there remains no reason for the situation to stabilize and every reason for it to continue to deteriorate yet further with price declines accelerating,” said BNP Paribas economist Richard Iley, referring to the record declines in the S&P report.

Prices of U.S. Treasury securities fell on Tuesday, weighed by ongoing concerns about inflation amid persistently high energy prices. U.S. stocks ended higher with the Dow Jones industrial average up 68 points. The dollar rose against major currencies.

Falling home prices have led to a wave of foreclosures that is expected to grow worse before it gets better. The crisis in foreclosures, which pressure prices even lower, has spurred plans by regulators and lawmakers to keep borrowers in their homes by forgiving a portion of their loan principal.

Read the full article at Reuters - Single-Family Home Prices Tumble in March

It may be the biggest case of legal thievery of the U.S. consumer in history. The real estate crisis is turning out to be anything but a normal market correction. The national foreclosure epidemic has topped 2.4 million foreclosures and like a locomotive it’s racing full speed ahead.

America’s foreclosure epidemic has widened and its tentacles now span across all income levels into the conventional mortgage market. A forecast 5.6 million properties will be foreclosed unless government powers intervene. The crisis has gotten so out of hand that many homeowners are beginning to fight back in what ever way they can.

Housing Predictor explores the crisis and details the story of one man, who is representative of at least hundreds of thousands in the throws of foreclosure. Howard bought a home only to become unable to handle higher mortgage payments when his adjustable rate mortgage reset.

Victimized by bad timing and nearly impaled by conditions beyond his control, he refinanced his home only to become a victim of a bank. Now he’s stopped making payments on his home in California and may well soon be foreclosed. His story is representative of millions of American homeowners who have been caught in the web of deceit by the nation’s home mortgage business.

Former mortgage consultant and Housing Predictor columnist Tony Evans chronicles Howard’s plight in his new column entitled “Banking Trickery Revealed.” Tony reports from the insider’s viewpoint on the plight of what could turn into America’s greatest financial nightmare.

Through its team of researchers and independent journalists, Housing Predictor forecasts more than 250 local housing markets in all 50 U.S. states, and provides the inside track for consumers to understand the nation’s most challenging economic crisis in modern history.

To read Tony’s new column, check your markets forecast and search for many of the best deals in real estate visit http://www.housingpredictor.com

In a recent article, North County Times writer, Zach Fox, predicts the fate of the California housing market through the end of this year.

“Just as April’s sales data was the best in months and provided some encouragement for real estate agents, the month’s huge foreclosure numbers offered more ammunition to housing market bears who see San Diego County’s housing recession dragging on for two or three years. All indications are that North County will see more foreclosures, not fewer, come up for sale over the next six months:

Fewer than half of San Diego County variable-rate subprime loans - where interest rates jump after a set period and typically carry high payments because of a borrower’s poor credit score or low down payment - have already seen payments escalate, according to a report by the New York Federal Reserve Bank.

Read the full article at: NCTimes - HOUSING: Foreclosure crisis to grow before it shrinks

Matt Woolsey with Forbes.com alerts people of foreclosure scams who are interested in purchasing a foreclosure property.

“Delinquent homeowners looking to break free from default notices are getting tricked by brokers promising to save them from foreclosure, only to make off with thousands in fees or what home equity is left.

“Take rent-to-buy scams. In cases like these, a fraudulent rescue company convinces a homeowner to sign over the title while building equity as a renter. The homeowner avoids foreclosure, but risks being evicted by the very firm that promised to save his home.

“The situation is bad enough in Florida, one of the nation’s foreclosure capitals, that State Attorney General Bill McCollum has filed suit against National Foreclosure Management, a mediation company, for allegedly defrauding troubled homeowners; fraudulent rescue companies in Illinois have been increasingly penalized, while in Massachusetts the for-profit practice of foreclosure rescue transactions has been banned.”

Read the full article at Forbes - Foreclosure Scams Lurking in Your Neighborhood

Union-Tribune staff writer, Emmet Pierce, covers the San Diego foreclosure market. In his latest article, he states:

“Nearly 50 San Diego County dwellings per day were lost to foreclosure in April, as the tally of mortgage failures rose 169 percent above last year, DataQuick Information Systems reported yesterday.

Buckling under the weight of risky adjustable-rate loans, many borrowers are giving up on ever bringing their debt current.

Serafina Jahries and her husband, Chris want to buy a foreclosed home. Most of the prospects they’ve seen need extensive repairs. “Some of the people have lost their jobs and they can’t afford their payments, but a lot of them just don’t want the home anymore,” said Linda Ring, a real estate agent who specializes in foreclosures. “They don’t want to ride out the storm.”

April was the county’s 37th consecutive month of year-over-year increases in foreclosures and notices of default, the start of the foreclosure process, the DataQuick research firm reported. There were 1,413 residential foreclosures countywide, a 35 percent increase from March but a rise of nearly 170 percent over April 2007.

The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.

The full article can be read at SignOnSanDiego.com - Foreclosure Forecast Grim

CNNMoney.com writer, Les Christie, criticizes the U.S. government’s plan to help homeowners from foreclosure.

“Several months ago the Bush administration came up with a great plan to fix the foreclosure problems plaguing the U.S.: The FHA Secure Loan. This loan was to be made available to homeowners who were having, or had, their variable interest rates adjusted and needed to refinance in order to keep making payments. So just how many people has the FHA Secure program helped avoid foreclosure since its inception? Try 3,000, according to an CNN Money.

“Though only 3,000 people have been saved from foreclosure, the FHA Secure program has become widely popular, with over 200,000 loans issued to date according to CNNMoney. While the program was meant to help people avoid foreclosure it has turned out to be a great program for people looking to refinance. The average homeowner refinancing with an FHA Secure loan is saving approximately $400 a month, according to the article.

“Many of the people using the FHA Secure program could continue to make their payments without a problem, and additionally many of them even had other options for refinancing out of their existing mortgages. For a program that was meant to help prevent foreclosure, I’m just not sure how effective it is. It is certainly helping people save money, but when the time comes that the government has to start coming good on these guarantees, taxpayers are going to have to foot the bill. Lending out at high LTVs to high risk homeowners is not appealing to banks for a reason, so if we think we are going to avoid having to pay up when all is said and done, we are sadly mistaken.”

The full article can be read at CNN Money