Even including the attempts by the government to slow down foreclosures through programs aimed at modifying the terms of loans, mortgage defaults continue to grow, according to a report from, RealtyTrac, a real estate data company.
“Rising unemployment and a new variety of mortgage resets continue to gradually shift the nation’s foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave,” said James J. Saccacio, RealtyTrac’s CEO in the Metropolitan Foreclosure Market Report.
Per the report, filings for foreclosures rose five percent in the third quarter, and 23 percent over last year. This includes auctions, bank repossessions and defaults. Taking into account the unreported abandonment by homeowners of their houses by banks so they don’t have to include it as an accounting event, and the numbers are even more staggering, to say the least.
The top states with the highest foreclosure rates continue to be Florida, Nevada and California, although some areas within these states did see some foreclosure filing decline. Still, that’s increasingly being seen has a very temporary situation based on loan modifications, which is only prolonging the pain of many because the economy isn’t improving at all and unemployment continues to grow.
This is only going to get worse because of the legally mandated resets of mortgages about to come due over the next couple of years, and which will really hit hard in the first part of 2010. The report already confirms this has began to happen, as 50 of the metropolitan areas with the highest foreclosure rates have already experienced sharp rises in filings over the last 90 days, and that shows no signs it will abate any time soon.
Some of these cities include Salt Lake City and Boise City-Nampa, Idaho area, which had the largest increases in foreclosures of the top 50 metro regions.
With rising unemployment and mortgage resets about to hit in big way, the pain for the American people will continue on, no matter what the government line on being in a recovery maintains. This doesn’t even take into account the coming fallout of commercial loans which are projected to be huge and to explode in the second half of 2010.
For the banking industry, it remains to be seen who is most vulnerable and how it will effect the bottom line. But any way you look at it, the hoopla of record profits and all of that isn’t going to last long, and the reality will hit hard as the story of the real condition of the banking industry emerges in 2010, and it isn’t going to be pretty.
