You probably aren't surprised to find out that October foreclosure filings surged. We're a long way off from the end of this crisis and it's only going to get worse before it gets better.
CNN Money reports this morning that 53,609 homeowners were forced out of their homes after banks repossessed them, up from 20,768 a year ago. Through October, 308,567 people have lost their homes to foreclosure and the number of new foreclosures filings keeps rising.
In October 224,451 foreclosure filings were reported nationwide, up 94% from October 2006 and up 2% from September, according to RealtyTrac. Many expect the numbers to go even higher in 2008 as ARMs will reset in even greater numbers through 2008. People who thought they could refinance before their reset will find it much harder to do now that credit is tighter and underwriting standards for qualifying for a new mortgage make it much harder to get a loan. Also, many people who bought since 2005 will find their homes are worth less than their mortgage in many areas of the country, as home prices continue to fall.
For many homeowners facing an interest rate reset, your best option is to first contact your lender to see if it will be willing to modify your loan and lock in your current interest. FDIC is recommending that lenders do that to avoid even more foreclosures. If that's unsuccessful call the Center for Foreclosure Solutions at 1-888-495-HOPE (4673) or a HUD counselor at (800) 569-4287.
Nevada tops the nation for number of foreclosures for a tenth month with one foreclosure in 154 households. California saw some good news with a 2% drop over September, but still holds the number two spot at one foreclosure for every 258 households. Florida's October rate was down 9% from September, but it held on to number three with one foreclosure for every 273 households. The national foreclosure rate is one foreclosure for every 555 households.
Lita Epstein has written more than 20 books including "The 250 Questions You Should Ask to Avoid Foreclosure" and the "Complete Idiot's Guide to Improving Your Credit Score."
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Reader Comments (Page 1 of 1)
11-29-2007 @ 12:52PM
Chilla said...
The article states, in typical media hyperbole, that "53,609 people were forced out of their homes." I suspect a large number of the foreclosures are on investment properties rather than primary domiciles.
11-29-2007 @ 1:06PM
Lita Epstein said...
Chilla,
I don't know why you feel you need to differentiate between a home owner or a rentor being forced out of a home. Whether the property was investment property or not, someone had to find another place to live. In fact in many cases rentors face even more of a hardship because they often don't even know a foreclosure is in process and are forced out of the rental property with only a few days notice.
Lita
11-29-2007 @ 2:12PM
Alec said...
This is a result of to much to little to late. Borrowing from Peter to pay Paul. Incomes must keep up with inflation proportionately. What we want is to stop inflation and also use it to pay debt we can't have both. If the damage is that foreign interests now own our National Debt and we cant pay them what do we do ? Banks are willing to drop prices but not rates because lower rates mean less profit . Banks need and use a margin of profit to pay for costs. We need to redefine inflation as a necessity to our economy or stop borrowing money like one might with a credit card.
12-04-2007 @ 6:53PM
william lindblad said...
To date I have yet to see a proposal that would do more than mitigate. Present government position seems to favor a rate moritorium on those that are current with payments and have ARM's that are due to reset. However, this is ONLY on what is considered "owner/occupant" properties and by HUD definition, this means you are LIVING there. I really can't see any means that is going to help those that bought speculative and never intended to live in said property. Unforunately, there are a lot of these. There is also a secondary effect that is emerging which is a slower economy and layoffs. This is sort of like putting kerosene on a fire and if it continues, will only add to the defaults. Nature of the beast. Companies protect their status on Wall Street and cost cutting protects the bottom line. This is only a temporary fix as the consumer must have income to purchase a product. The latest auto sales figures reflect this to be a truth and this area has always been a good economic indicator. By March most of the ongoing building construction will be completed. Expect massive increases in un-employment.
Expect more layoffs across the economy as business adjusts.
I do hope that someone has a magic wand as we do need a wizard.