Reports from the news media the last couple of months have been uncharacteristically upbeat concerning the economic outlook. I’m seeing more foreclosures than ever and wondering what sources could they possibly be using for this so-called “upswing”?
Yesterday, national news medias were spouting the number of people receiving unemployment benefits fell to 7.1 million the week ending March 17 (latest data available). Sounds impressive until you realize the figures are falling because people have run out of benefits and are automatically dropped off the unemployment rolls. There are nearly 13 million people unemployed and looking for work.
A large portion of people no longer receiving unemployment benefits will stop paying their mortgages – leading to more foreclosures.
Also in yesterday’s news – Yahoo announced 2,000 employees were being laid off, a 14% cut and their deepest cut yet. Yesterday, the stock market lost 125 points – the worst loss in a month. This is the upswing?
I predicted and wrote in this blog, February 14, 2012 “Foreclosures Likely on the Rise”. The rise would happen because major banks (lenders) stopped or slowed down the processing of foreclosures while waiting for the government’s $25 Billion settlement. The $25 Billion settlement was negotiated February 9, 2012. Foreclosures are on the rise.
Today, more than 6 million homeowners are behind in their mortgages and foreclosures rose in 21 states. Tampa, Florida alone, just had a 64% rise in foreclosures. In other words, the “Floodgates are opening up on foreclosures, and there’s no way slowing the wave down.” In 2012, we will have more foreclosures processed than the all-time high in 2010.
The mortgage system was designed to fail. Loans were given to people whom they knew could not possibly repay. Then there was the ‘robo-signing’ where documents weren’t reviewed. Interest rates were high, banks asked for no money down or no proof of income. These are areas where the mortgages are going to hit the hardest.
Coupled with the jobless running out of unemployment benefits, the new face in foreclosures is the middle class with a conventional 30-year fixed mortgage and either unemployed or underemployed. More than one in four homeowners are underwater (owe more on their homes than its worth). The mortgage crisis, and it is a crisis, has wiped out $7 trillion in the American household wealth.
Unfortunately, experts all agree there will be a revival of foreclosures this year. Combined with the excess of unsold inventory of homes and bank-owned homes, the housing market will further decline in prices. They expect housing prices will continue in a downward spiral through 2013 and stay down until 2016. Investors are not buying homes because they know if they wait, they can get homes at an even lower price.
If you, or someone you know are one of the 6 million homeowners behind in your mortgage, contact an attorney who specializes in Foreclosure Defense as soon as possible.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.