October 15, 2009
U.S. Foreclosure Filings Jump With Prime And Alt-A Leading The Way
Foreclosure filings in the U.S. increased 29 percent on a year-over-year basis in September, but fell 4 percent as compared to August (a record high month).
Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A “shadow inventory” of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said.
The pace of prime and so-called alt-A loan defaults is accelerating as subprime defaults slow, Standard & Poor’s analysts led by Diane Westerback said yesterday in a report. Prime loans are those made to borrowers with the best credit records while alt-A loans are considered riskier because they were often granted without documenting the borrower’s income.
For the third quarter U.S. foreclosure filings jumped 23 percent year-over-year.
First Published: October 15, 2009 9:15 AM
Comments from "Plugged In" Readers
Move along. Nothing to see here. :)
It's hardly surprising. The low hanging foreclosures are taking place rapidly. And the next tier is starting to feel the pain.
Posted by: eddy at October 15, 2009 11:33 AM
Are these stats even relevant anymore? I've heard anecdotes of people who stopped paying their mortgages months ago and have not seen anything foreclosure-related from their lenders. Not even a whimper. Basically living for free.
All this talk of the real estate "market" is almost moot these days given there is no clean, functional free market. The government is basically the sole mortgage lender, and foreclosures are piling up with limited action being taken. It's like what used to be a clearing market is being held in some sort of artificial stasis.
Where would mortgage rates be if Fannie and Freddie had been allowed to fail? How much will the coming FHA bailout cost us? Will the government ever allow the stilts to fall out from under the house of cards? Or will it take a currency crisis to stop the insanity and let the market adjust to reality?
All rhetorical questions that I'm not equipped to answer. But rising shadow inventory just doesn't have the same punch it used to. Or maybe I'm just jaded.
Posted by: Legacy Dude at October 15, 2009 11:57 AM
I agree with you Legacy Dude. I have been watching for the market to TRULY correct itself naturally for, geez, a year and a half now, and you really don't see much evidence of it, do you? I do a lot of research and have half a brain, so I'm not buying (plus my own risk tolerance is relatively low since I'm not sure how long my carry will be). I keep waiting for the market to truly absorb all this shadow inventory but it seems we're delaying the true force of this downturn for a very long time.
Posted by: Jason at October 15, 2009 7:59 PM