Industrywide foreclosure rate was 0.54 percent in the fourth quarter, the highest in its 37 years of surveys. Amidst the reporting that Countrywide was reporting an increase in foreclosures was the news that Countrywide was also increasing the number of loans that they were servicing. Additionally it was reported that foreclosures are now the highest ever recorded in 4th quarter 2006. For Countrywide having more loans in the pipeline is a clear sign that the long predicted consolidation in the marketplace is continuing. Countrywide as the largest US mortgage lender isn't immune to the effects of the subprime market but it's far more likely to weather the storm. Furthermore customers are more likely to chose vendors who are larger (and thus seen as more trustworthy). It's going to be interesting to see what Wells Fargo reports on April 17th.

Labels: Calabasas, countrywide, countrywidesubprime, forclosures, foreclosures37yearhigh

  ¶ Industrywide foreclosure rate was 0.54 percent in the fourth quarter, the highest in its 37 years of surveys. 0 Comments

ARMS - Driving up foreclosures! This is a pretty good article which comes the AP via Yahoo. The article is surprisingly good and highlights what loose credit standards combined with ARMS leads to. All the examples cited in the article are on the margins, ie lower value homes, sub prime loans and in markets not nearly as hot as California. Overall according to the Mortgage Bankers Association, foreclosures fell in all categories except sub prime loans. My gut tells me that the numbers will be way up for sub prime loans as these are people who cannot get credit elsewhere and very often cannot re-finance into a fixed loan because of poor credit.

""ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."

Last year, foreclosures hit a historical low nationwide at about 50,000. But that number has more than doubled since then, according to Foreclosure.com.

Let's keep in mind something. The number has doubled it's only JUNE! That means we are on pace to having four times the number of foreclosures in 2006 than we did in 2005. That's a huge spike and pretty frightening.

This won't have as much of an effect on California just yet,

"Gaines pointed out that although California's default notices are rising by the thousands, actual foreclosure sales remain in the hundreds. Because of California's still-active housing market, homeowners there can sell their properties before going into foreclosure.

On the flip side, in less active markets like Texas and Georgia, homeowners can't find a buyer in time and are forced into foreclosure."

A bit of statistics manipulation and things don't seem as bad as things really are in the Golden State

California, where the median home price reached $468,000 in April, leads the nation in the percentage of homes purchased with adjustable rate mortgages. Nationwide, ARMs account for 24 percent of all home loans.

"In our zeal to make mortgage lending more available to a greater number of people, it's normal to expect the foreclosure rate to go up," Gaines said.

The problem with this number is that it takes all mortgages and lumps together. So my father in law who purchased his home in 1977 for $77,000 (now worth well over $750,00 0) is lumped in. This hides and understates the real problems that ARMs are going to be in California. As I covered in a recent post 61% of new mortgages in 2005 are interest only! So people buying at the very top of the market with financial instruments set to reset in 2007 and 2008. 2008 is going to be a very tough year for anyone who bought with an ARM.

Labels: ARMS, californiaforeclosures, forclosure, forclosures, Foreclosure

  ¶ ARMS - Driving up foreclosures! 3 Comments

Not an entirely healthy sign. This covers the three fold rise in foreclosure scam artists. These guys scam the default notices in the public record and then claim to be a white knight to help the person out. In most of these schemes the owner surrenders title to the white knight who then walks off with the equity through selling the house. A increase of this size in one year in reported cases of this fraud indicates that many owners are having a tough time adjusting to the new larger mortgage that accompany rising proporty values. While this starts at the lower end of the market and slowly works it way up.

Labels: californiaforeclosures, forclosures, forclosurescam, foreclosurescamartists, SouthCoasttoday, southerncalifornia

  ¶ Not an entirely healthy sign. 1 Comments