Check out this interesting animated map showing how foreclosures exploded in the United States on a county-by-county basis. Interesting, but not surprising to folks in the Piedmont Triad, is the fact that the number of foreclosures in the area was already depressingly high in January '07, before the housing crisis hit most of the rest of the country. For instance in Forsyth County 1 in 837 homes was in foreclosure in January '07, and 1 in 549 in July '12. As you'll see when you look at the map, many other regions started out in better shape than the Triad, but quickly caught up as the economy tanked.
The economic meltdown this country has been living through for the last four or five years has been especially cruel to those citizens who probably won't have time to make up for their losses once the economic recovery begins to pick up steam. If life's hard for those who are in their 30s and 40s, imagine what it's like for someone in his 50s or 60s, trying to figure out how to rebuild the nest egg that was obliterated by the market crash, long term unemployment, an underwater mortgage or all of the above. That's what makes this item so disheartening:
According to AARP:
- About 600,000 people who are 50 years or older are in foreclosure.
- About 625,000 in the same age group are at least three months behind on their mortgages.
- About 3.5 million — 16 percent — are underwater, meaning their home values have gone down and they now owe more than their homes are worth.
AARP said that over the past five years, the proportion of seriously delinquent loans held by older Americans grew more than 450 percent.
I'm going to warn you ahead of time that this is potentially a very depressing post. Have you ever wondered how many houses in your area are in foreclosure? No need to wonder. Just go to Google Maps and do the following (found via Fec's blog):
Google Maps Foreclosure Listings
1. Punch in any US address into Google Maps.
2. Your options are Earth, Satellite, Map, Traffic and . . . More. (Select “More”)
3. The drop down menu gives you a check box option for “Real Estate.”
4. The left column will give you several options (You may have to select “Show Options”)
5. Check the box marked “Foreclosure.”
Below is a screen shot of a Google Map after I plugged in a Forsyth County, NC address and zoomed out. Those aren't measles you're looking at.
Clear title is becoming a serious issue in the residential mortgage sector. It might be more accurate to say that clear title has been a serious issue in the residential mortgage sector, but it's now becoming a more commonly known problem. It appears that what's happening is people are realizing that the banks have done some pretty crappy, and sometimes fraudulent paper work on the mortgages that they're now trying to foreclose, and as the courts have started calling them on it the title insurance companies have decided that they can't insure what the banks are trying to resell. Here's the scoop:
So why is it a big deal that Old Republic National Title isn’t going to insure Chase’s or GMAC’s foreclosures?
Because if a house doesn’t have clear title, you can’t get a title insurance policy for it. If you can’t get a title insurance policy for a property, lenders won’t lend because there is a huge risk that someone else is going to come forward with a valid title claim and take away the property and they will lose the investment they’ve made in the mortgage.
Clear title is one of the main tenets of homeownership in this country. If lenders can’t be assured that the seller (in this case, the banks who are reselling millions of foreclosures as REOs) have clear title to the property, they won’t issue a mortgage.
Which means homeowners can’t buy homes.
Which will be the perfect storm scenario that tanks the already crippled housing market.
If you think the current foreclosure freeze is bad news, think about what will happen if the millions of homes that are already in foreclosure and the millions more heading into foreclosure can’t be resold.
You know where all this is heading, right? Hello class action lawsuits.
(h/t to Fec for the link)
Rep. Alan Grayson, who's one of those Congresscritters who occasionally make C-SPAN the most entertaining daytime television viewing, explains the corrupt foreclosure system (h/t to Fec):
There is a stunning graph about foreclosures between 2005 and 2010 here. One of the pieces of info contained therein is that 23.3% of ALL mortgages are underwater. Not of sub-prime mortgages, or mortgages taken out during the boom, or mortgages in Florida, etc. That's 23.3%, or nearly a quarter, of every single mortgage in the US of A is underwater. The chart also shows that there will be over 1 million homes repossessed in the US in 2010.
Just when you thought it might be safe to go back in the (real estate) water:
These seriously delinquent loans are the 4.3 million loans MBA Chief Economist Jay Brinkmann referred to as the "shadow inventory" on the conference call this morning. Not all are really "shadow inventory" since some of these loans will be modified, some will be cured (probably very few), and some are probably already listed as short sales. But it does suggest a significant number of distressed sales coming…
Thirty four states and the District of Columbia have total delinquency rates over 10%. This is a widespread problem.