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How Many U.S. Housing Units Received Foreclosure Notices in 2009?
A foreclosure filin
g includes default notices, scheduled foreclosure auctions and bank repossessions. In all, 2.2% of all U.S. housing units, or one in every 45 properties, received at least one foreclosure filing in 2009. That number increased from 1.84% in 2008, 1.03% in 2007 and 0.58% in 2006. In 2009, a record 2.8 million properties received a foreclosure filing, a 21% jump from 2008 and a 120% increase from 2007.
According to the latest Treasury report, the servicers participating in HAMP offered more than 1 million three-month trial period modifications to borrowers in distress. The criticisms of HAMP have been cited here before:
The banks simply can’t be entrusted with following HAMP – especially when they successfully lobbied to get immunity from liability and prosecution for (not) working with the program.
The HAMP program does not cover jumbo loans, or mortgages on second homes or investment properties. According to one estimate, those three categories comprise 60 percent of all the residential mortgages.
Modifications of first mortgages are not a priority for large banks, for good reason. If they modify the first loans, their junior positions get wiped out. The Big Four banks – Bank of America, Citibank, JP Morgan, and Well Fargo- own $400 billion in residential second mortgages.
On top of that, many mortgage companies that service the loans for these banks are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans. Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure. So the longer borrowers remain delinquent, the greater the opportunities for these mortgage companies to extract revenue — fees for insurance, appraisals, title searches and legal services.
To quote Upton Sinclair: “It is difficult to get a man to understand something when his job depends on not understanding it.”
With more foreclosed houses coming on the market, it will continue to be cheaper to own than to rent. Or to rent a recently foreclosed property than where you may be currently renting. All this spells further loss for current multifamily owners.
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