URBAN INSTITUTE: DECADES OF FORECLOSURES TO COME

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EDITOR’S NOTE: For those seeking to buy a home to live in, and for those seeing to buy a “bargain” for investment BEWARE! The pressure on this housing market will not stop until the foreclosures are stopped and the real process of modification and settlement begins.

Downward pressure on the housing market can’t be manipulated successfully at these volume levels. Everyone knows that there are millions of homes that are not YET for sale but will be if the present inventory is ever sold out. And most people are getting to know enough information about title to realize that they might be buying the property from someone who doesn’t own it or who acquired title through fraudulent or defective means.

Canadian buyers are looking for “bargains” under $100,000. They are in for a rude surprise when they discover that the price drops well below what they aid even at these levels.

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by KERRI PANCHUK

The number of seriously delinquent mortgages in the nation’s largest metropolitan areas slowed this year, according to a new study from the Urban Institute. But foreclosures remain a burden on the housing market, prompting the policy research group to call for a resolution to the housing crisis to ensure the foreclosure backlog is cleared out in a reasonable time period.

The institute said the serious delinquency rate in the 100 largest metro areas slowed to 9.3% in June from 10.4% in December 2009, according to data from Foreclosure-Response.org. The Urban Institute said the serious delinquency rate is classified as the share of loans in foreclosure, plus all of those that are more than 90 days in arrears.

“The foreclosure inventory that is building up is going to take an incredibly long time for lenders to clear,” said Leah Hendey, research associate at the Washington firm. “At the current pace of foreclosure sales, we are looking at a process that could take decades to complete. It is critical that the status of these properties be resolved quickly if we want to stabilize communities and housing markets.”

This decline was driven by a drop in delinquent loans, which fell to 3.7% in June from 5.5% in December 2009.

In hard-hit areas like Riverside and Stockton, Calif., the foreclosure rate declined significantly, dropping 1.9 percentage points and 1.7 percentage points from the peak two years ago.

Florida, New York and Illinois experienced a different shift in the market with foreclosure rates climbing in cities throughout those states.

In Tampa, the foreclosure rate jumped 2.8 percentage points, and in Chicago, it grew 2.3 percentage points. Those three states are judicial foreclosure states, which force a court to make a final decision before a property can leave the process. This leads to a growing backlog, the Urban Institute said.

Mortgage originations are down in all of the 100 metro areas surveyed, as well. Some of the largest drops occurred in Buffalo, N.Y., where originations fell 39% this year, and Miami, where new home loans fell 82%, the report said.

Write to Kerri Panchuk.

Tags: bankruptcy, borrower, Canadian buyers, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, housing market, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, title, trustee, WEISBAND
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