Foreclosures Top 100k for 1st Time in September
The foreclosure crisis in the US worsened in September as banks seized more than 100,000 properties for the first time. Overall, foreclosure filings rose about 3 percent. More than 930,000 properties in the third quarter received a foreclosure-related notice, and nearly 290,000 homes were lost to fore closure between July and September, the highest 3 month total since the crisis began.
Foreclosures are expected to fall now as several of the nation’s largest mortgage servicers have voluntarily stopped filing them after the revelation that thousands of foreclosures have been filed with improper paperwork.
The nation’s foreclosure crisis began in 2006, when a collapse of the stock market and rising unemployment sent the US into its worst economic setback since the Great Depression of the 1930s. Home prices plunged dramatically in many states such as California, Florida, Nevada, and Arizona. Scores of homeowners were either unable to continue making payments or simply walked away from underwater mortgages, leaving lenders with backlogs of properties worth less than what was owed on them.
Since then foreclosures have become a significant part of overall sales. In September, for example, foreclosures accounted for about 31 percent of total home sales. During the third quarter, 1 of 139 homes received some type of foreclosure filing. Nevada continued to be the hardest hit state with 1 in 29 homes receiving a filing during the quarter. Arizona follows with a ration of 1 in 55 and Florida saw 1 in 56 homes receive a filing in the quarter.
September saw a record 102,134 homeowners lose their homes, the first time in history foreclosures have hit six figures in a month. The news comes on the heels of a 10-month low for President Obama’s Home Affordable Modification (HAM)in August. The program, which is designed to help Americans save their homes in the troubled economy, helped just 33,000 homeowners in the month. In 2009, at the onset of the program, Obama vowed to help as many as 4 million homeowners with the plan, but so far only 449,000 have been helped, just over ten percent of Obama’s goal.
On Wednesday, attorneys general from all 50 states announced a coordinated probe into the foreclosure procedures of several of the nation’s largest lenders. Reports have surfaced in recent weeks that thousands, perhaps tens of thousands of foreclosures have been processed improperly. Of particular concern is the lenders’ use of so-called “robo-signers”, or workers who routinely sign thousands of foreclosure-related documents in a day without verifying the information they contain, as required by law.
The immediate aim of the joint investigation is to halt the practice of foreclosure shortcuts and improper procedures, and to come up with solutions to prevent this type of widespread improprieties in the industry in the future.