32% Foreclosure increase an improvement

by: Jason Springer

Thu Dec 11, 2008 at 10:13:01 PM EST

That's the state of things in the housing market:

Some 5,582 filings were reported in the month, a mix of mortgage delinquency notices, scheduled sheriff's sale auctions and bank repossessions, according to RealtyTrac, an Irvine, Calif.-based data collection firm. That number represented a 34 % decline from October.
One in 622 New Jersey homes received a foreclosure filing in November, below the national rate of one-in-488 households. The Garden State ranked 15th in rate of filings for the month, down from 8th in October.

Unfortunately drowning less water is still drowning. They call this a temporary "lull" and I can only imagine what the February numbers will look like after the holidays and new year. The real wave may be coming this summer and has barely been talked about:

"The next wave (of foreclosures) is coming next year and in 2010, and that is primarily due to these pay-option ARMS and the five-year, adjustable-rate hybrid ARMS that are coming up for reset," said William Longbrake, retired vice chairman of Washington Mutual. The giant Seattle-based bank, which collapsed this year under the weight of its bad mortgage loans, was one of the biggest originators of pay-option ARMs during the lending boom.
The next wave may be even more difficult to handle than the last one.
"It's going to get tougher to modify loans as these option ARMs come into their resets," Federal Deposit Insurance Corp. Chairwoman Sheila Bair told msnbc.com this week. "Those are more difficult than the subprime and traditional adjustable rates to modify because there is such a huge payment differential when they reset."

Let me say up front that I am able to pay the mortgage on my condo thankfully, but this is the wave I would get swept up in eventually if things aren't re-examined. Luckily I still have 4 years until my 2nd mortgage resets because I got a 7 year ARM (Adjustable Rate Mortgage). The problem is that mortgage companies aren't doing 100% mortgage financing now, so my 80/20 mortgage can't be redone unless I come up with a nice amount of cash. The thinking was that my home would be worth more and that I would be in a better place financially. There were no problems getting loans, there was plenty of refinancing going on and nearly everyone was able to get approved. We think it's bad now, but this seems like it's just the 1st wave passing by. I can only imagine how many others are in my position. Sorry to ruin your day.

Jason Springer :: 32% Foreclosure increase an improvement