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Housing Falls Off the Cliff As Foreclosures Continue Unabated
FDL News Desk ^ | 09/16/2010 | David Dayen

Posted on 09/16/2010 7:57:56 AM PDT by SeekAndFind

The “extend and pretend” approach of the Treasury Department, through HAMP, has reached its end, and foreclosures are surging higher than ever.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

There are enough homes in delinquency that the properties entering the system slowing will have no material effect on foreclosures increasing. And that shows no signs of abating. What’s more, banks are basically forbearing the first couple months of delinquency, artificially lowering the number of homes entering foreclosure because they don’t want to initiate the process.

Less trial modifications are being taken up through HAMP, as word of mouth spreads that the program is less than helpful at best and a predatory lending scheme at worst. The banks remain reluctant to do affordable workouts, especially with second liens, because they’d rather pretend the profits from them are on the books. They’d rather get something for the homes by returning them to the market, even though sales are at their lowest in 15 years. This giant “shadow inventory” just becomes a loss leader month after month for the banks, as more people just decide not to pay and take the risk of playing foreclosure roulette.

(Excerpt) Read more at news.firedoglake.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: bhoeconomy; democratcongress; democrats; economy; fail; foreclosures; hopeychangey; housing; obama
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To: OregonRancher

Means there will be an awful lot of $60,000 houses.

Also means, it won’t matter as our entire economic system will have collapsed, which seems to be the goal.


41 posted on 09/16/2010 9:34:46 AM PDT by Rational Thought
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To: rarestia

It is hell, esp. here in Arizona!!!


42 posted on 09/16/2010 9:36:31 AM PDT by hsmomx3
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To: SeekAndFind
Interesting. I think Vermont has the lowest foreclosure rate because it never really got caught up in the real estate boom in the first place. It's a small state that's mostly rural, and I'll bet that on a per-capita basis there are more people living there in homes with no mortgages than almost any other state.

Pennsylvania is another state that probably has a low foreclosure rate. Very old and static in a lot of ways, which made it seem like a dinosaur a decade ago but provides a degree of comfort these days.

43 posted on 09/16/2010 9:37:21 AM PDT by Alberta's Child ("Let the Eastern bastards freeze in the dark.")
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To: SeekAndFind
For what it's worth -- please check my comment:

http://www.freerepublic.com/focus/news/2589698/posts?page=20#20

44 posted on 09/16/2010 9:41:21 AM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
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To: GonzoGOP

I see what you mean. I’ve heard of that happening in the Inland Empire area of California, too. Entire tracts of McMansions and Garage Mahals just standing vacant in the desert. Such strange times.


45 posted on 09/16/2010 10:14:57 AM PDT by ponygirl
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To: Rational Thought

Heh. Finally. I have been waiting for housing sanity for a long time. I knew prices were unsustainable simply because not enough of us young’uns could afford one. When that happens, the market inevitably falls out.

Then we’ll see prices the equivalent of what our parents and grandparents paid for theres, and guess what? They will be so upset that instead of making money on their homes, they will be lucky to get back what they paid for it.


46 posted on 09/16/2010 10:41:27 AM PDT by BenKenobi ("Henceforth I will call nothing else fair unless it be her gift to me")
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To: BenKenobi
I did a search on property values about 6 months ago. As of then, I did find locations in California where prices were back to levels of the late 80’s.
47 posted on 09/16/2010 10:49:04 AM PDT by Rational Thought
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To: ponygirl
Entire tracts of McMansions and Garage Mahals just standing vacant in the desert.

When I was a kid there was an area we used to play in that was all subdivided, but had no houses. Streets, sidewalks, fire plugs but no buildings, just prairie grass. It was a subdivision that had been started before the depression and then abandoned when the crash hit. This was 50 years later and it was still sitting there half developed. Time had just past it by. It is part of a forest preserve now. Turns out the prairie grass won, erasing the signs of human folly in 80 years.

I wonder how many of these ruins will still be around 40 years from now when we are the ones telling out grand kids about the times before the "Big Crash".
48 posted on 09/16/2010 11:07:39 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Rational Thought

I’ve in California for 11 years, near Studio City. And with the oversupply of housing you would think there would be no construction but within one block of me are three sites underway, 2 48-condo projects and one 200-condo project all within one hundred yards of each other. I have no idea who is going to buy these. Crazy.


49 posted on 09/16/2010 11:12:12 AM PDT by DHerion
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To: hsmomx3

Where do you live ?


50 posted on 09/16/2010 12:35:29 PM PDT by ComeCulturedGirl (I win !)
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To: SeekAndFind

The death of the middle class is the final result of this tug of war.

The blame ultimately though shifts on the Democrats for going back to trying to raise up an informal ogliarchy.

The Republicans whatever their failings never made any promises or lied about what they were fighting for.

It is not bitterness that drives me to put these words down but just observation.People who voted for this administration looking for a helping hand to get them out of this...........got pretty much screwed over.

Doesn’t make them right or wrong for asking for them but you can’t have that kind of double-faced presence running this country.

Mind you all I keep thinking is what a liability it is going to make in terms of Banks having to hold over these properties.


51 posted on 09/16/2010 12:45:13 PM PDT by Del Rapier
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To: ComeCulturedGirl

Phoenix


52 posted on 09/16/2010 12:50:53 PM PDT by hsmomx3
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To: hsmomx3

How much you would get if you rent your home ?


53 posted on 09/16/2010 12:56:34 PM PDT by ComeCulturedGirl (I win !)
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To: ComeCulturedGirl

Not sure as we have nowhere to go and no $$$ to go anywhere. Right now, our home needs a total paint job inside, new carpeting, there are termite lines outside on the foundation .........I don’t know. It does annoy me that my husband walked out on us so I am left with this baggage and three teens.


54 posted on 09/16/2010 1:42:16 PM PDT by hsmomx3
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To: Rational Thought

you are exactly right - if you buy now you will be a very rich man in 20 years


55 posted on 09/16/2010 5:37:36 PM PDT by Mr. K (PALADINO FOR GOVERNOR OF NEW YORK)
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To: Rational Thought

It’s an old bank rule, very simple. Your total monthly
expenditures including mortgage, insurance and all other
payments, should not exceed 36% of you gross pay.

Very simple.


56 posted on 09/16/2010 5:47:34 PM PDT by OregonRancher (Some days, it's not even worth chewing through the restraints)
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To: Mr. K

I will if you loan me the money!


57 posted on 09/16/2010 5:53:46 PM PDT by vigilante2 (Reelect Nobody)
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To: OregonRancher

My apologies. I misread your post as meaning the cost of the house shouldn’t exceed 2 to 2 1/2 times one’s income.


58 posted on 09/16/2010 6:26:02 PM PDT by Rational Thought
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To: Rational Thought

No, you read it right.

Yearly income = $50,000

Max mortgage = $125,000 with 20% down.

Standard banking rules for decades. Changed with the feds
forcing banks to loosen lending practices (red lining).
Banks used to hold their own paper and were very careful to
whom they loaned to.


59 posted on 09/17/2010 7:24:02 AM PDT by OregonRancher (Some days, it's not even worth chewing through the restraints)
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