Foreclosures Doubled In September

Last month saw twice as many foreclosures than last September, says RealtyTrac, the foreclosure tracking organization.

Even with an 8% decline in foreclosures from August’s truly mind boggling numbers, September still managed to see 223,538 foreclosure filings.

From Bloomberg:

Foreclosures are deepening the U.S. housing recession by pushing more homes onto a market where sales and prices are dropping. There’s a 10-month supply of unsold homes, the highest in at least eight years. As many as half of the 450,000 subprime borrowers whose mortgages will re-set through November may lose their homes because they can’t afford the higher payments, according to a report by Credit Suisse Group.

“The truth of the matter is that borrowers are going into default as soon as they hit their adjustments,” said Rick Sharga, executive vice president of marketing at Irvine, California-based RealtyTrac. The company sells foreclosure information and has a database of more than 1 million properties from 2,500 U.S. counties.

California has the dubious honor of having the most actual bank repossessions (in which the property is unsellable and must be surrendered to the bank), with 7,853.

October is expected to be an exciting month for the subprime meltdown, with $50 billion in ARMs set to reset.

Foreclosures Doubled in September as Loan Rates Rise (Update5) [Bloomberg] (Thanks, Chris!)


Edit Your Comment

  1. Thank goodness I rent!

  2. what comes up must come down I suppose… Florida, Cali, and the retirement desert shot up a lot before the most recent “housing adjustment.”

  3. MPHinPgh says:

    @thnkwhatyouthnk: Thank goodness I rent!

    Just pray your landlord doesn’t have a funky mortgage, or you’ll still have to go through the hassle of finding another place.

  4. Anonymous says:

    i think next year, i’m buying one of those forclosed homes.

  5. howie_in_az says:

    @thnkwhatyouthnk: Odd, I was just thinking “thank goodness I have a fixed-rate mortgage because I’d really hate to go back to renting”.

  6. DrGirlfriend says:

    @INconsumer: That’s what I’m counting on. I’m hoping this means prices in my area come down, because it’s getting almost impossible to own anything other than a 1 bedroom condo on the outskirts of town.

  7. XTC46 says:

    @thnkwhatyouthnk: The problem with that is that more people losing their homes means there will be more people looking to rent. More people looking to rent means price of rent goes up. I’m in the same boat. I’m just happy I just signed my lease so my rent is stable for at least the next year.

    @INconsumer: This is the plan for a lot of people I know. Seems like a good idea to me, I just wish i were in a position to buy.

  8. itmustbeken says:

    WOO!! We’re #1!!

    Went to see a friend in Davis this weekend (outside of Sacramento).
    6 foreclosures within 2 blocks. The new problem is these foreclosure houses being neglected and running down the values of the other homes in the area. Niiicee. Thanks for this Fed Reserve!

  9. hypnotik_jello says:

    @itmustbeken: How is this the Fed’s fault?

  10. Protector says:

    …and yet townhomes still fetch $225k+ in my area. LOL.

  11. ugly says:

    @itmustbeken: How is this the Fed’s fault? People outspent their incomes. If the Fed is to blame at all it’s for not jacking rates up sooner. In fact, I’m a proponent of them not bailing out all the banks with the Cash-infusion corporate welfare that’s going on as well.

    Other things that basically screw the population are longer term mortgages (which have a VERY short term impact of increasing affordability) and 0% down. If the rules went back to 15+% down and max 25 year mortgages, all prices would drop. The only downside is that people who believed that their homes were their retirement savings would have a wake-up call.

  12. taka2k7 says:

    No wonder the savings rate in this country is negative. If houses were not being counted on as a retirement nest egg, then people would have increase their savings.

  13. TheBigLewinski says:

    Why sjould you and I (ala The FED) have to bailout @ssholes that make bad business decisions? Suck it up cupcake and let them writedown the loans. Will Wall Street take a hit? Perhaps, but letting the chips fall is the reality of our capitalist society.

    You can see the effects of the FED’s recent .50% rate cut, the dollar is now worth less than the Canadian loon, who da thunk it? Soon the dollar will be worth more as recyled paper.

  14. busrider says:

    That title is a bit misleading as foreclosures actually declined in September.

    As I’m sure many of them are the result of the poor economy, I find it difficult to sympathize with those who tried flipping 5 or 6 houses only to have the bubble burst and leave them with all those mortgages to pay. They knew the risk and I’m not going to be the one to help bail them out.

  15. rickshawed says:

    People keep saying that rents are going to go up as a result of all of this. That, because more people are losing their homes, more people are going to be flooding the rental market. I disagree.

    First off, you have owners who bought new homes before selling the old one and are carrying two mortgages. They are often renting these out to recoup some cash. That’s adding to rental inventory. You also have people who are renting rooms in their houses to bring in extra cash to avoid foreclosure.

    Secondly, and more importantly, there is a TON of inventory out there in the condo market that won’t sell. These developers are rapidly turning these condos into rental units. Yet even more rental inventory.

    The rhetoric that ‘rents are going up’ seems to me to be nothing more than Realtor propaganda to make renters feel like they need to buy. I’d also like to point out that just because it’s not a seller’s market, doesn’t automatically make it a buyer’s market.

    I have been renting for years and only spending 8% of my income on housing while I bank the rest. 3 weeks ago, my landlord told me he was raising the rent by 10%. I told him I’d be out in 30 days because I know I can get a place of equal value for the same cost. He immediately backed off and told me it was no problem and not to tell any other tenants.

  16. kwsdurango says:

    @itmustbeken: This is not at all the Fed’s fault. The people facing foreclosure spent more than they could afford and didn’t take the time to read / understand the mortgage contracts they were signing. Too bad for them.

    The fact that the Fed lowered rates to help these people is only a short term “fix” that has already had significant repercussions on the value of the dollar. The long term impact could be even worse – consider that the Fed will have to eventually raise rates even more to prevent against inflation when various institutional treasury bond holders start dumping dollar denominated bonds because the yields are so low, thus increasing the supply of dollars on the market and reducing the value further.

    What am I doing? I saved and saved, waited and waited and now I’m shopping for a home. I’ll buy a house I can afford and get a FIXED standard 30 year mortgage. It’s not magic it’s patience and discipline.

    Oh, and if you’re investing and looking for a hedge against the declining dollar, may I suggest energy funds (the price of oil is set in dollars as the value of the dollar declines, the price tends to go up – paired with increased consumption, the energy sector is a good thing). My funds are kicking ass.