New Record For Foreclosures In The First Half

Foreclosures hit an all time record in the first half of 2007, according to Bloomberg. Since the beginning of the year 926,000 foreclosures have been filed, 56% more than a year earlier.

California and Florida felt the pinch last month, as well as Ohio and Michigan. Bloomberg says home prices have fallen as much as 25% in California and Florida.

The jump in 30-year mortgage rates by more than a half a percentage point since May is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. Foreclosures also are increasing as the supply of unsold homes hit a record 4.43 million in May, according to the National Association of Realtors.

Foreclosure rates in “most states remained substantially above last year’s levels,” RealtyTrac Chief Executive Officer James Saccacio said in a statement.

In June, defaults surged 87 percent to 164,644 from a year ago, said RealtyTrac, a seller of foreclosure data, in the statement today. Last month’s total was 7 percent lower than in May. California, Florida, Ohio and Michigan accounted for half the national total in June.

Nevada again leads the nation in rate of foreclosure, with one foreclosure for every 175 households.

U.S. Foreclosure Filings Jump to Record in First Half (Update3) [Bloomberg]
(Photo:Drewski2112)

Comments

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  1. B says:

    Time to buy a house?

  2. Sudonum says:

    @B:
    Hold out a little longer, prices are going to drop some more.

  3. Thrust says:

    I truly feel sorry for these foreclosures. The banks give you the impression they’ll do their best for you, and get you financing that won’t bankrupt you, then you end up takin it up the rear. And they now have SO many mortgages designed to keep you in debt for life.

    My favorites

    The 0-down mortgage, which suckers people into thinking they can buy a house when they have no savings.

    The Interest-Only mortgage. Really, I only have to pay the interest? But how long will I be paying off this house? Forever? Isn’t that just renting then? No, oh because rent doesn’t leave you owing the bank if the property value drops. I see…

  4. CRSpartan01 says:

    You do realize that these banks lose lots of money from foreclosures, right?

    My foreclosure firm is getting slammed… and the summer is supposed to be our dead season.

  5. j-o-h-n says:

    @Sudonum:
    I would agree. Remember Summer is the *good* time to sell your house (at least in places with a winter). Plus a whole bunch of ARM loans are due to adjust this Fall. I expect this Winter will be a mighty big fire sale as people and banks try to unload into a glut. You might even find lenders lowering interest rates to attract some business (assuming you are a good credit risk, I doubt they’ll be in the mood for more bad risks).

  6. swalve says:

    I bought a house with a 0 down mortgage. I’m not a sucker.

    The financing method has NOTHING to do with this problem. The problem is that consumers don’t know what loan product they are getting.

  7. tylerk4 says:

    What most people don’t realize is that most of these sub-prime loans aren’t a case of the banks or lenders being preadatory. Many of the defaulted loans were a result of a shady broker and/or a shady borrower lying about income and pulling other tricks in order to get the lender to fund the transaction.

  8. quagmire0 says:

    The problem is people with eyes bigger than their wallets. They try to buy into their ‘dream home’ too early and end up buying more than they can afford. That is where these foreclosures come from. If people actually lived *below* their means (gasp!) and saved some money, these rate increases wouldn’t cripple them into being foreclosed on.

  9. rmz says:

    …and 90% of those foreclosures are properties owned by Casey Serin.

  10. Chicago7 says:

    The worst part? More and more of that “Buy Foreclosed Housing!!!” spam.

  11. AnastasiaBeaverhousen says:

    At what point do we expect ADULTS to be responsible for their actions? If you’re committing the brunt of your income to something for several decades isn’t a little research in order? I feel absolutely zero pity for these fools and hope we don’t collectively bail them out with tax dollars.

  12. Observer2121 says:

    I would like to submit a prayer for the people near foreclosure.

    Dear Lord, please give Ben Bernanke our fed chairman the guts to raise rates again so that more peoplpe can be forced to put there homes on the market. I was too poor to take advantage of the real estate boom and these idiots pushed prices of real estate through the roof, out of my price range. God…..if you can find it in your heart to get interest rates to at least 7% I would really appreciate it. In Jesus name, Amen.

  13. jetshack says:

    THRUST says: “The 0-down mortgage, which suckers people into thinking they can buy a house when they have no savings”

    I don’t think of myself as a sucker… far from it. After graduating from college with education degrees, my wife and I were looking to buy our first home, as the district we were hired to work in had very little rental / apartment housing. As new graduates, we had no substantial savings to put down for a down payment. The cash reserve we did have we wanted to hold onto to take care of unforseen expenses.

    We applied for the Banc of America “teacher” loan and were accepted. We did manage to purchase our home when rates were at their absolute lowest but even today I would highly recommend the program to any prospective new home buyers that qualify.

    After it was all said and done, we moved into our home without paying a dime down as the seller agreed to pay our closing costs. The terms on our loan are stellar; 30 year fixed @ 5.75%.

    And our cash reserve (as expected) was quickly used up covering those crazy first time home buyer expenses; sod, lawn mower (and other various lawn essentials), washer/dryer, blinds, ceiling fans, etc…

  14. B says:

    @AnastasiaBeaverhousen: In what way are they not being held accountable for their actions? Last I checked, they’re being forclosed upon, and their credit rating is ruined.

  15. AnastasiaBeaverhousen says:

    @B: They avoid accountability by crying foul. Almost every article in the mainstream media blames the lender for liberal guidelines. As we speak Dodd is trying to work congress for billions in aid to save these people who made the largest decision of their lives with little or no research.

  16. Sudonum says:

    @AnastasiaBeaverhousen:
    Dodd’s not doing it to save any poor homeowners in over their head. Dodd is doing it to save the banks and funds that bought these mortgages. Oh… he’ll also tell you he’s doing it to save the economy.

  17. AnastasiaBeaverhousen says:

    @Sudonum: My mistake, I am aware there are several others working on that bailout also. The fools throwing all that capital at the subprime market should have absolutely no out. Consumers making ridiculous investments is one thing but the finance professionals behind the funding should know better. If not Dodd, someone is working on alternative govt funded financing at below market rates for the schmucks facing foreclosure.