The high level of foreclosures is still affecting the US housing market, prompting numerous new laws and regulations, most of which will merely serve to delay the inevitable. The problem varies from state to state, but here are some recent headlines and news stories about foreclosures in Virginia and other states.
The Richmond Times Dispatch says rural areas in Virginia have been hard hit.
Foreclosures rates in rural areas have doubled since 2008, as people lost their jobs and were unable to make their house payments, according to the report by Housing Opportunities Made Equal of Virginia Inc. More than 200,000 foreclosure notices have been filed in Virginia since 2006, including 60,000 notices of default or repossessions in 2010. Source
Business Week agrees, although both sources are citing a report from “Housing Opportunities Made Equal,” a non-profit based in Virginia. The report states
In 2010, the largest increase in foreclosure filings occurred in rural Virginia
•Foreclosure filings eased slightly at the end of 2010, mostly because of moratoriums from large national lenders so they could sort out mortgage servicing issues.
- –Without these moratoriums that were put in place, Virginia would have seen the largest number of foreclosure filings since the beginning of the Great Recession.
•Since 2006, there have been over 200,000 foreclosure filings in Virginia and more than 60,000 in 2010 alone.
•Foreclosure rates in rural areas have nearly doubled since 2008, while rates in urban areas have remained fairly consistent.
•High foreclosure volume has revealed some significant mortgage servicing issues. A survey of housing counselors has found significant servicing issues statewide.
•In 2009, nearly four out of every five mortgage loans were sold to an investor –the highest rate since at least 2004. Since 2004, more than sixty percent of mortgage loans have been sold to an investor within one year of origination.
- –This further complicates the mortgage recordation process and may create mortgage servicing issues in the future that may lead to more faulty foreclosures.
The full report (PDF) is available here.
A VA House subcommittee recently decided to kill a bill that might have slowed the pace of mortgage foreclosures in Virginia. MyFoxDc reports,
With one dissent on an unrecorded show-of-hands vote as the powerful banking lobby looked on, a Commerce and Labor subcommittee sent the bills for more study by an obscure gubernatorial task force.
The action included all House bills addressing what Sen. Chap Petersen, D-Fairfax, calls “drive-by foreclosures.”
Delegate Bob Marshall’s bill, which was before the 11-member panel, would have extended the foreclosure notice requirement from 14 days to 45. It would also require that loan and property records be recorded in local courthouses.
“What you saw in there was government of the banks, by the banks and for the banks,” Marshall, R-Prince William, said afterward. Source
Across the country, buying a home is steadily becoming cheaper than renting one. With increased demand for rental accommodation as more families are evicted, combined with the banks holding steadily increasing housing stocks as “shadow inventory,” the gap continues to widen and according to Trulia, it is now cheaper to buy than rent in 72% of major US cities – assuming you can raise the financing. Short sales continue to be a growth business, but be wary of a hidden tax burden if you are the seller. The IRS considers and money written off from your loan to be a monetary “gift,” with tax due.
The foreclosure problem continues to grow, despite a lull in the proceedings during December 2010 as local state banks were forced to actually follow the law when foreclosing. RealtyTrac says a record number of foreclosure filings were made in 2010 – 2.9 million. Shocking figures. This is a quote from their recent press release:
“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 — which we estimate may be as high as a quarter million — will likely be re-started and add to the numbers in early 2011.” Full release
This is – of course – also adding to the “shadow inventory,” of homes certain to come on the market, but stalled in some way.