'Enormous backlog of foreclosures'
Alarming number of the day, courtesy of Lender Processing Services:
"As of the end of February, foreclosure inventory levels stand at more than 30 times monthly foreclosure sales volume."
So even though U.S. mortgage delinquencies are declining, "an enormous backlog of foreclosures still exists with overhang at every level," the company said.
Other notable numbers from LPS:
Foreclosures on option ARMs -- also known as "neg am" because the minimum payment option causes negative amortization, increasing the amount borrowers owe -- have risen 23 percent over the last six months, "far more than any other product type."
Just over one-fifth of mortgages that were at least three months behind a year ago are now current.
Average delinquency for a loan in foreclosure: 537 days, a record.
LPS, which provides services to the mortgage industry that include default management, handles more than half the country's foreclosures. Like its mortgage-servicer clients, it has been hit with allegations of robo-signing and the like. The Florida Attorney General's Office launched an investigation last year.
Categories: The foreclosure mess
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Comments
I really don't find anything wrong with these statistics. I don't see how this will affect me or the sale of my home. This is the Spring season and everything seems fine to me and my friends. Our stocks are doing wonderfully. Cannot tell you how pleased we are with our fianancial planner. Life is really good at the top. I do feel for those in the foreclosure but just stay in the house for free. Why not?
Posted by: Beverly Banzer | March 29, 2011 3:09 PM
Soo I can stay in my house for like a year before the bank forecloses on me?! Sweet. But not really.
For some related anecdotal news, a coworker recently told me that her lender automatically lowered the interest rate on her jumbo loan ARM (don't get me started on that one.) automatically to like 3 percent when the initial rate expired.
According to her, she didn't have to fill out paperwork or anything.
I also notice foreclosures are not seeming to decrease in my area (Zillow...I know the site's not particularly accurate...), and a lot of the foreclosures seem to be smaller places like townhouses and condos.
I was surprised. Do you think banks are giving extra help to jumbo mortgage borrowers to keep them out of foreclosure?
Posted by: JuanitaBeasley | March 29, 2011 5:05 PM
Hmm, I haven't heard of anyone else who got an automatic decrease in their interest rate. Mortgage experts: Is this something you're seeing in the jumbo-loan category?
One thing to remember about the high number of days in default: Once a borrower gets behind by a certain amount -- three months, say -- the servicer won't accept monthly payments, only the past-due amount in full. If there's a long back-and-forth over a loan modification request (with multiple requests to resend paperwork, a common complaint), that also extends the default timeline. Any battle in court will add to the time, too -- not to mention refiling foreclosure paperwork with the courts to replace robosigned originals.
Posted by: Jamie Smith Hopkins | March 29, 2011 5:19 PM
Juanita- i suspect one of two scenarios.
1 your friend is lying and embarrassed about the situation they find themselves
(most probable)
2 They took out a 5/1 ARM about 5 years ago. It is conceivable/probable that the rate did go down from the start rate since both the fed funds rate and the libor are essetiannly 0. These are the indexes used in ARM's.
Also- i would bet that she is embellishing any rate. Example- she has 3.875 and calls it "3". In any case, her description of just automatically reducing to 3 is wrought with lies. Banks just dont give money away. You have to reneogtiate the terms of any contract sign them-even when in your favor.
Posted by: elweedz | March 29, 2011 7:04 PM
Good lord-elweedz needs to start proofreading before firing off these posts!!
Also- Juanita, my wording was a bit strong. Perhaps your friend doens't understand the loan. My apologies.
Posted by: elweedz | March 30, 2011 2:23 PM
Yes, some people that are also getting un-solicited modifications on their mortgage. The banks are beginning to get CRUSHED in court when they try to foreclose because the rampant fraudulent way in which the loans were securized and transferred. The whole "robo" scandal was the banking industry's way of trying to paper over the fact they lack standing to foreclose on millions of mortgages. Luckily some little guys with brains faught back and busted it open.
The un-solicited modification is a way for them to re-affirm the debt and redo the paperwork so next time they will be able to actually foreclose. It is only worth it if you have, or think you will soon again have, equity in your house and you can afford the new terms.
Does anyone deserve a free house for defaulting? No! But neither should the banking industry be able to run over those in trouble via circumventing laws in their hunt for more bucks.
The banks initiated this mess and then were bailed out with YOUR money. The very next step was to advise many who were a month or so behind to default if they wanted help....and then promptly initiated foreclosure procedures via doctored paperwork to prove this party or that party was owed.
This is all due to loss of morality in our financial institutions and it's marriage to the US government. Banks are supposed to be boring and stable...not casinos in which the top get rich by gambling depositor money (and now tax-payer money). Nothing has changed and they will crash again...next time it will indeed be worse. Our banking system has evolved to be nothing more than a sea of leaches.
Posted by: George | March 30, 2011 3:07 PM