Mortgage Foreclosures Set New Record

And while the current administration in Washington D.C. continues to “rearrange deck chairs on the Titanic” and claim “all is well” we are clearly not headed in the right direction – economically or the housing market. See the most recent mortgage foreclosure report from Lender Processing Services showing that banks currently have over two million loans in the foreclosure process. The exact number of mortgages in foreclosure is 2.2 million homes. Not only that but mortgage foreclosure starts month over month are up 232,865 or a sizable 5.700%

In addition, the number of homes that are delinquent by ninety days or more is three million nine-hundred seventy thousand. The homeowners that are more than ninety days delinquent has increased from three hundred forty-four days to three hundred eighty-eight days. It’s obviously taking longer for banks two foreclose on mortgages for two reasons.

The first in states where they have judicial foreclosures the courts are back-logged with cases. Secondly, when banks foreclose on a home mortgage they have to write that loss down on their books. Otherwise it is still listed as an asset to the bank. If they foreclose on all the homes eligible for foreclosure the largest banks would be insolvent. Thus, they “Pretend and Extend” and let people remain in the homes even though they haven’t paid their mortgage in over a year or longer.

The states with non-judicial foreclosures are getting to them somewhat faster than the state with the judicial foreclosure process, but banks still want to give people every opportunity to get caught-up so they don’t have to write-down so many mortgage loans.

We contend that since housing has led every recent economic recovery in the last century it is imperative that the government quit playing politics and end all of the programs that only delay the inevitable. We need to quit artificially supporting housing prices and let them truly “bottom-out” and if a bank fails so be it. We have to hit bottom before we can start to re-build our economy.

Forcing banks to clear out all of their foreclosable properties is the first step.

 

 

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