MORTGAGE CRISIS FAR FROM OVER-FORECLOSURES RISING AND NO END IN SIGHT TO REPOSESSIONS OF HOMES AT EVERY INCOME LEVEL

Foreclosure activity fell in April as lenders repossessed homes at a record pace but started far fewer new actions against struggling homeowners, signaling a plateau in loan failures.

Taking less action does not necessarily mean less foreclosure in the future, they have just leveled off due to the government's pressure on banks not to have a speedy process, that the news media may pick up on.

No meaningful improvement is likely this year, however, with mortgage modifications and high unemployment only delaying the inevitable for most of these borrowers, the Irvine, California-based real estate data company said.

But nationwide April foreclosure filings -- notice of default, scheduled auction and bank repossession -- fell 9 percent from March and 2 percent from a year ago.

This was the first year-over-year drop since RealtyTrac started tracking annual foreclosure rates in January 2006.

"What we're really seeing is the effect of lenders slowing down the initial notices of default while they are processing what's already in the pipeline," said Rick Sharga, senior vice president of RealtyTrac.

Lenders filed default notices on 103,762 properties in April, down 12 percent in the month and 27 from a record 142,000 one year ago.

Banks, meantime, took control of 92,432 properties in the month, a record, up 1 percent from March and 45 percent from a year earlier.

With notices on 333,837 properties, one in every 387 U.S. housing units got a foreclosure filing in April.

"The housing market is still in critical condition but is stable," Sharga said.

Borrowers are increasingly tapping federal programs that encourage lenders to alter loan terms to help owners stay in their homes. Still, the overwhelming majority will wind up in foreclosure, he said.

A record 2.8 million U.S. properties got a foreclosure notice in 2009, according to RealtyTrac.

"We still have over a million properties in foreclosure, we still have about 5 million seriously delinquent loans and we're ultimately going to have to work through all of those, so we're not out of this yet," Sharga added.

Foreclosure auctions were scheduled for the first time on 137,643 properties in April, a 13 percent drop from a record 158,000 in March but a 1 percent rise from a year ago.

RealtyTrac sees "overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties" most of the year, James J. Saccacio, chief executive, said in a statement.

METRO AREA IMPROVEMENT

Foreclosure actions fell in nine of the top 10 metro areas from a year ago.

Cities with populations of at least 200,000 in Nevada, Florida, California and Arizona still dominated the list.

Las Vegas had the highest metro foreclosure rate, with one in every 60 housing units getting a filing, but actions fell 3 percent from April 2009. Modesto, California, was in second place, with activity sinking 32 percent in the year.

FIVE MAIN TROUBLE STATES

Foreclosure activity in fives states -- California, Florida, Michigan, Illinois and Nevada -- accounted for 52 percent of the reduced total foreclosure actions in April.

California led the way, with 69,725 properties getting a filing. That was down 25 percent in the month and almost 28 percent in the year.

Arizona, Georgia, Texas, Ohio and Virginia were the other states with the highest foreclosure activity.

Nevada, Arizona and Florida also posted the top state foreclosure rates last month. These were among states with the most overbuilding and inflated prices during the boom and the most pain during the bust. Unemployment later swept up other states into the foreclosure tidal wave.

Nevada had the highest rate for the 40th straight month, with one in every 69 housing units getting a filing.

Other states with foreclosure rates among the top 10 in April were Idaho, Michigan, Illinois, Georgia and Colorado.

When will it all end? No end in sight until the economy improves, and that will probably mean no earlier than the next president taking office.

The current administration is moving full speed ahead with creating more taxes to stifle job creation, to stifle entrepreneurship, and with the yet to kick-in mandates for health insurance, there will be no recovery possible.

STIMULUS SPENDING SEEMS TO BE STIMULATING RISE IN FORECLOSURES! WAS IT NOT SUPPOSED TO STOP THEM?

We all heard all the great stories from the politicians and their sound-bites. "We will help the little people, we will get their mortgages refinanced, we will get their loans modified, we will help them stay in their homes", yadda, yadda yadda.

The facts are however not as represented, and there is nothing in the announced plans that will change that for now. Until people are working, there will be foreclosures. By the way, have you noticed the similarity in the statistics that the foreclosures tend to move in sync with the unemployment rate?

Foreclosures in April exceeded even March's blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report.

One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping.

"April was a shocker," said Rick Sharga, a spokesman for RealtyTrac. "I would have bet on a dip because March foreclosures were so high.

Instead, filings inched up 1% from March and rose 32% compared with April 2008.

There were 63,900 bank repossessions, the last stop in the foreclosure process. More than 1.3 million homes have now been lost to foreclosure since the market meltdown began in August 2007.

The increasing foreclosures will force RealtyTrac to rethink its forecasts, according to Sharga. "We had been predicting 3.4 million filings for the year," he said, "but we'll blow those numbers out of the water."

The lion's share of April's filings were ones in the early stages of the process, such as notices of default, according to James Saccacio, RealtyTrac's CEO.

Bank repossessions actually fell 11% for the month, compared with March. That's due, according to Saccacio, to the many legislative and company moratoriums that have prevented the foreclosure process from starting on delinquent loans.

Because fewer loans entered the process in past months, there had been fewer getting all the way to repossession. But now that those moratoriums are over, the volume of foreclosure filings is increasing.

"It's likely that we'll see a corresponding spike in [repossessed properties] as these loans move through the foreclosure process over the next few months," Saccacio said in a prepared statement.

Ten states accounted for 75% of all foreclosure activity, and they fell generally into two categories: one-time bubble markets and the rust belt.

California, which easily outpaced every other state with with 96,560 filings. Other hard-hit former boom towns were Florida, Nevada and Arizona.

Those rust belts towns with the most filings were Illinois, Ohio and Michigan. Georgia, Texas and Virginia filled out the rest of the top 10 list.

Nevada, with one filing for every 68 households, had the highest foreclosure rate in the land. Florida, with one for every 135 households, ranked second; and California, with one for every 138, was third.

Las Vegas continued to be the worst-hit metro area. It had more than 14,000 filings in April, one for every 56 households and 20% more than in March.

The Cape Coral-Fort Myers, Fla., area was second with one in 57, a 31% month-over-month rise. Merced, Calif., where home prices have plunged almost two-thirds from their peak, had the third-highest rate.

Five other California metro areas ranked in the top 10: Modesto was fourth, Riverside-San Bernardino fifth, Bakersfield sixth, Vallejo seventh and Stockton eighth. Miami and Orlando rounded out the list.

Raised expectations

Not helping, of course, is the steady erosion of home prices. The National Association of Realtors reported record home price losses Tuesday.

"[The home price decline] will lead to more foreclosures," said Mike Larson, a real estate analyst for Weiss Research.

The loss of home values put many more mortgage borrowers underwater, meaning they owe more on their loans than their homes are worth. That increases foreclosure rates in two ways: Underwater borrowers have no home equity to draw on should to pay for unexpected expenses such as big medical bills or major car or home repairs. That's makes them more likely to miss payments. And when home values fall far below mortgage balances, homeowners often walk away from their loans.

"There has been much more 'deed-in-lieu-of foreclosure' activity lately," said Sharga. This is a transaction in which borrowers simply tell their banks that they're not going to pay their mortgage and hand back their keys, and deeds, to their lenders. "People are making the rational financial decision to walk away from underwater homes," he said.

HOW MUCH CAN YOU FINANCE ON A $1 HOME FORECLOSURE AND ACTUALLY MAKE IT LIVABLE?

There are so many rescue and bailout plans for foreclosed homeowners, but the foreclosed homes, when the foreclosure does go though to its ultimate end, resulting in a sheriff's sale, often (38% of the time) is too damaged to qualify for mortgage financing of any type for a new buyer who will needs funds to fix it first.

When this occurs, the property simply sits, vacant, abandoned and an eye sore, often vandalized for its copper plumbing, cabinetry or any other fixtures that can be stolen and resold.

So in effect, about 1,216,000 homes will sit as abandoned eye sores.

So much for the usual government help.

The issue is how much of the financing for such a home can include some added funds to fix the home, making it salable and habitable?

The government programs do not provide for that, and in fact they would discourage any such project financing, since the standard method of obtaining financing is by having the home APPRAISED as to its lendable value.

What do you tink will be the value of a stripped and damaged home to be submitted by the appraiser for financing? How about literally nothing, or a token $1.

How much home financing can one get on an appraisal of $1????

Do you see the point now? We need a different level of appraisals to clear out the glut of abandoned homes which can be fixed up and purchased for a reasonable amount.

Is there nobody out there to figure this out?