Foreclosures Down; Don’t Jump For Joy
For the first time in 18 months, foreclosures actually slowed down, giving the housing industry a little bit of relief. But only a little bit of relief because it’s definitely only temporary.
What caused the reduction? Two main things occurred. One, the federal government and state attorney generals started investigations into “robo-signing” of all those foreclosure notices, and that made a lot of banks stop or slow down processing for awhile. Two, like last year, some banks decided to withhold on foreclosing on properties for the last couple of months of the year because of holidays and the like.
Why is it only a temporary solution? Because unemployment is still high and some of those bad loans are still around. Some banks are finally coming around, though. Wells Fargo is modifying around 15,000 mortgages for people who were almost foreclosed upon, which comes to around $2 billion, due to practices by banks they took over. They will also be paying around $32 million to people who have been foreclosed upon, but that only averages out to around $2,670 per family; that’s little comfort, but it’s something I guess.
Nevada still leads the nation in foreclosures, with Utah jumping into the mix, albeit briefly, since the other “normal” states with high foreclosure rates, Arizona, California, Florida, Illinois, Georgia, Michigan, and Colorado, benefited most from the slowdown of foreclosures and bad banking practices. I still believe most foreclosures should be halted until the investigation is completed, and I really believe there should be larger penalties against banks that participated in what I’m calling the destruction of the housing industry, especially those banks that got federal stimulus money.
In any case, a breather is nice for those families suffering right now. It won’t be nearly enough, but maybe some will benefit at least for the holidays.