Not that long ago, if you heard “California,” “Nevada,” “Florida,” or “Arizona,” you might think of fun in the sun. Now, you’d be just as likely to recognize them as the epicenters of the foreclosure crisis.
Once retirement havens or places where people built a second or third home, the states have in a few short years become the leaders in lost homes, numbering in the hundreds of thousands.
Remember 2005 and 2006? People you knew traded homes like they were baseball cards, and without much more difficulty. Why not? The house you just bought for $200,000 in April might be sold for $300,000 in September. It was so easy. If you weren’t in real estate, you were missing the easy money.
Then it all stopped. Just like that. The credit crunch and mortgage-market collapse of 2008 turned what had been an astonishingly vibrant housing market into a wasteland of ruined credit, plunging home values, missed payments, bank seizures, and revelations of questionable loans by the truckload. In 2010 we’re two years removed from the beginning of the housing meltdown, but we still appear to be far from what anyone could reasonably consider stability.
RealtyTrac, which monitors foreclosures, said in October that foreclosure filings were reported on 930,437 properties in the third quarter. That was up almost 4 percent from the prior quarter, but on the plus side it was a 1 percent decrease from the same quarter in 2009.
All told, the number equates to 1 out of every 139 housing units in the country. And in September, bank repossessions exceeded 100,000 for the first time in any month ever.
In 2009 a record 2.8 million mortgaged properties got foreclosure notices, a 21 percent increase from 2008 and more than double the year before, RealtyTrac said. If 2010 ends up not quite as bad, it might have something to do with a peculiar but fleeting respite: Bank of America, JPMorgan Chase, and other big lenders temporarily put thousands of foreclosures on hold in order to examine potentially faulty paperwork brought on by what came to be known as “robo-signing.”
The expectation, though, is that once the probes of foreclosure practices finish, the pace will pick up where it left off. For homeowners at risk of foreclosure, there are some options to keep their house — nearly 150,000 households sought modifications in September alone, through private venues and a Treasury Department program called HAMP. More than 1 million modifications have been made since the year began.
At the moment this dire situation is the norm for housing. Eventually the crisis will abate. But as long as unemployment remains high and the economy remains sluggish, this is the reality: hundreds of thousands of foreclosures, every month, across the country. That was the case in 2009, and unfortunately, it repeated in 2010.
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