Foreclosures Are Rising: CNBC

Published: Tuesday, 6 Apr 2010 | 1:37 PM ET
By: Diana Olick
CNBC Real Estate Reporter

Foreclosed Home
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Foreclosed Home

The new foreclosure wave is here.

Yes, banks are ramping up loan modifications and ramping up short sales and ramping up deeds in lieu of foreclosure, but the plain fact is that as the systems are oiled, the loans are moving through faster, and the pig in the python is showing its face.

We won’t get the numbers until next week, but sources tell me they will likely be a new monthly record.

Tens of thousands of loans have been hitting the “notice of trustee sale” bin, and that means they are coming to foreclosure.

The actual foreclosure numbers have been down recently because of all the modification efforts, but as we see more loans not qualifying for modifications and more loans defaulting on modifications, the foreclosure numbers rise.

And this is just the beginning.

All the uniform policies and practices that the government has put in place, whether on modifications or short sales, will quicken the process. Foreclosures, which can now take 2 years plus to complete, will happen in less than a year, start to finish.

Clearly the Administration knew of the impending rise in foreclosures, as it revamped its modification, refinance and short sale programs last month, increasing incentives all around and pushing for principal write down. The big question of course is how will the new wave affect home prices, especially in the hardest hit markets.

I pushed Fannie Mae’s chief economist Doug Duncan on this in an interview today on the mortgage giant’s new National Housing Survey. He cited the over 5 million mortgages out there that are seriously delinquent, and said that while the 30-day delinquencies seem to have peaked, “certainly some of the foreclosure backlogs are working their way through the system at this point.” He also said home prices will dip again before hitting bottom later this year.

Yesterday we saw a big bump in the Realtors’ Pending Home Sales Index, but my sources tell me that was largely driven by contracts on short sales, which have a far lower rate of closing than regular sale contracts. Estimates are that only about 35 percent of short sale contracts go to closing versus 80 percent of conventional sale contracts.

The home buyer tax credit deadline is 24 days away, and that is pushing some of the numbers up, but not as much as some had hoped.

Credit Suisse’s Dan Oppenheim noted an uptick in buyer traffic in March thanks to the credit, but his survey of real estate agents found, “buyers remain hesitant due to employment concerns. Most of the demand occurred at the low-end of the market.”

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New round of foreclosures threatens housing market: The Washington Post

Washington Post Staff Writer
Friday, March 12, 2010

The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

What will they do now since the Commericial Real Estate is just beginning to see it’s side to defaults? AMERICA BRACE ThySELF! This is one roller coaster ride ith NO end in sight.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

  Go to The Washington Post article HERE