Foreclosures in the US surpass quarter-million
Bloomberg
It was the 37th straight year-on-year increase in filings."This is tough to fix, because so many people are underwater," Bruce Norris, president of the Norris Group, an investment firm specializing in foreclosed properties, said in an interview. "Until debt goes down or prices go up, this is going to be a mess."The housing market lost an estimated $3.3 trillion in value last year and almost one in six owners owed more than their homes were worth, Zillow.com said last week.The U.S. economy shrank 3.8 percent in the fourth quarter, the most since 1982, and payrolls plunged by 598,000 in January, pushing the jobless rate to the highest level since 1992.
Home prices have fallen every month since January 2007 and tumbled 18.2 percent in November, according to the S&P/Case-Shiller index of 20 U.S. cities. President Barack Obama may support federal guarantees for modified home loans as the administration and Congress consider ways to help borrowers facing default or negative equity.
Extensive efforts
January filings fell 10 percent from the previous month because of "extensive foreclosure efforts on the part of lenders and government agencies," including temporary moratoriums by mortgage-finance companies Fannie Mae and Freddie Mac and the state of Florida, James Saccacio, chief executive officer of RealtyTrac, said in the statement.
Bank seizures fell 15 percent. "Workout programs can help some people who intend to stay in the house, but the big problem is people who don’t want to carry an underwater house," Robert Van Order, adjunct professor of finance at the University of Michigan in Ann Arbor and former chief economist at Freddie Mac, said in an interview. "Negative equity is not going away soon."The January total was the fourth-highest since RealtyTrac began records in January 2005, said Rick Sharga, executive vice president for marketing.
One in 466 U.S. housing units received a filing. "Hundreds of thousands" of home loans worth more than the property, or in areas where values have eroded by 50 percent or more, are "the root of the problem" and should have their principal reduced or deferred, Sharga said. A Feb. 10 speech by Treasury Secretary Timothy Geithner was "content free" about ways to stem foreclosures, he said.