After a two week hiatus, the foreclosure process starts again in earnest in South Florida. According to the Sun Sentinel:
Foreclosure auctions and some evictions and new filings were put on hold for the last two weeks of the year, as banks and lenders gave homeowners a temporary reprieve for the Christmas season. But Monday, first foreclosures of 2011 got under way. In Miami-Dade County, 187 foreclosed homes went up for auction, the first batch of about 1,200 scheduled to be sold online this month. Source
The Register Guard in Oregon reports that many foreclosure “victims,” are damaging property as they leave in order to either express unhappiness or take a few valuables:
Foreclosure in Lane County — as everywhere — has become a mess, and that’s a literal mess and not a euphemism for sloppy or illegal paperwork. A foreclosed Hawkins Heights property owner, for example, cut a hole in his kitchen wall so he could take his jacuzzi bathtub with him as he left. Other homeowners have smashed in the walls with golf clubs or covered the walls with obscenities. Many foreclosed homeowners stop paying garbage bills before they’re forced out, and so they leave dump truck loads of trash and abandoned possessions in their wake. Source
Bloomberg reports that the five largest loan providers in the US, including BoA and Citibank, look likely to settle with the 50 state attorneys general who are investigating illegal practices in the foreclosure process. A slap on the wrist seems likely to be forthcoming, but it is unlikely any of the big five will be held in any way accountable other than a small fine and no criminal charges.
All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan and Ally Financial’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures, and Bank of America, the largest U.S. lender, froze foreclosures nationwide. Source
According to the Red White and Blue Press, Wells Fargo and Wachovia are both seeing increases in bankruptcies, despite watered down attempts at alleviating the problem using Making Homes Affordable Program.
Wells Fargo/Wachovia Mortgage homeowners are among the many who have sought out mortgage assistance through home loan modification programs, but have continued to see bankruptcy increase in some situations. There have been homeowners who have faced either foreclosure or bankruptcy as a result of troubles related to their home loan and personal finances, and it seems that some federal home loan modification assistance opportunities have not been enough to prevent these problems. Source
So, the amount of foreclosed homes for sale continues to rise, and there seems no end to the problem in sight. The strong disconnect between the two (now distinct) American economies would appear to be growing. While Wall Street grows fat on the Chinese consumer boom, Main street suffers.
Across the pond in the UK, things are slowly coming to a head. With homes sales depressed to around 35% of usual levels, an increase in the VAT rate to 20% and growing unemployment, we expect to see a growth in repossessions. The usual media merry go round is confusing the issue, but – if any country’s finances is heavily dependent on rising home prices to fuel consumer borrowing – and therefore spending – it is the UK. Recent statements include these:
The British Government Inc recently proposed legislation to reduce the rights of homeless people, which is rather shocking considering the likelihood of another increase in repossessions this year. According to totallymoney:
Homeowners attempting to sell their property to escape financial difficulty are falling further behind as economic confidence and the lack of first-time buyers at the bottom of the market make it difficult to sell their homes. Estate agents are selling and average of just one property a week meaning that those in trouble trying to sell their homes are being faced with the very real threat of repossession. A repossession hearing comes before UK courts every two minutes.
The government has recently proposed legislation to reduce the rights of homeless people by placing them into insecure tenancies in the private rented sector at a time when its cuts are likely to increase the number of people forced into temporary accommodation.
Campbell Robb commented: “It is unbelievable that at a time when every two minutes someone faces the nightmare of losing their home, the government is proposing to reduce the rights of homeless people who approach their local authorities for help.
“We urge the government to think again about the cumulative effects of its policies on people who are at real risk of losing their home.” Source.
Still – not to worry says the Royal Institute of Chartered Surveyors – they expect repossessions to fall in 2011, although they do admit that “Higher unemployment is clearly a threat to this view,” and suggest that the recent changes in lending criteria (substantially higher deposit requirements and much tighter salary/loan ratios) have probably changed permanently. – their full download PDF is available here -PDF
We do not see a UK recovery for some time yet, and when the dust settles, the costs of delaying a correction are going to be felt for years to come. There are also massive regional variations to consider. While the Central London Banker bonuses are likely tio prop that market up, repossessions in Yorkshire, for example are probably going to continue to put downward pressure on the market for some time.