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.

RECORD FORECLOSURES SHOW GOVERNMENT PROGRAMS ARE JUST A LOT OF TALK..IS THAT NEWS TO ANYBODY?

"Worst three months of all time" for foreclosures, blare the headlines....what happened to saving all those homes advertised by the government during one of its numerous bailouts? I guess the bailouts are not for homeowners.

Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter - a sign the plague is still spreading.

The number of homes receiving foreclosure filings is skyrocketing across the country. Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state -- the best record in the country.

The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders.

That deluge contributed significantly to the quarter's record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes.

"REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties," James Saccacio, RealtyTrac's CEO, said in a statement.

Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. Not only has the Obama administration's Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

And in some low-price markets, lenders simply aren't following through on foreclosures, according to Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland.

"They'll even set the date for the sheriff's sale, but they don't file the final papers," he said. "They hold it in abeyance and let the residents stay in the house."

In ever more frequent cases, delinquent borrowers want out of the mortgage worse than the lenders. There are no firm statistics for it, but many industry watchers claim the percentage of REOs caused by borrowers voluntarily walking away from their homes is skyrocketing.

A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When "negative equity" approaches 50%, 17% of households default, even when they can still afford their mortgage payments.
No end in sight

The foreclosure crisis may not diminish anytime soon. "The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers," Sharga said. "It's going to be a lingering problem."

Plus, the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly.

And because there are so many delinquent borrowers, Sharga predicts the banks will be slow to take back their properties and put the repossessed homes back on the market.

"It's hard to envision [the banks] putting millions on properties up for sale and cratering prices," he said. "Recovery will be slow and gradual. I don't see home prices getting much better until 2013."

Stay tuned,,,,for the next chapter.