Foreclosures - the real data (rent, mortgage broker, credit)

[Whataride]

I was looking over the report by Realtytrac, which is the company that keeps giving us all of the grand information on the foreclosure rates, and find some interesting information that they just seem to leave out. More than 99% of the homes in TN are not in foreclosure. Also, if you look at the data for 2007 there were 45,834 foreclosure filings in the state....on 25,914 properties

correct me if my math is wrong...

45834/.983% = 4,662,665 property adresses in the state

actual number of addresses foreclosed 25,914

25914/4,662,665 = .555% of all property adresses in TN were in foreclosure

How many of these were owner occupied vs investment properties? How many of these are builder properties that they have given back to the banks?

How about giving credit to the other 99.445% of us that are paying our bills.
How about the news media reporting some of this information?????

link to article U.S. FORECLOSURE ACTIVITY INCREASES 75 PERCENT IN 2007

I have now finished my vent - have a nice day.

[bbkaren]

It irks me too...I can't stand that so many people allowed themselves to get sucked into those subprime mortgages.

If I don't read the small print on something, I'm not a victim; I'm a fool. It's my mistake and I need to either sell at a loss or let them foreclose. It makes me crazy that the govt is bailing everyone out...

People take a chance when investing in a home. If they can't afford the mtge payment they should rent a while until they can afford it; a fool is talked into more house than they can afford, but there's plenty out there. And it's the fool's fault, not the broker's.

[hiknapster]

Tennessee is 11th in the nation for foreclosures. It just missed the top 10.

In the big picture, yes, there are a lot of people that are not in foreclosure. The problem is, although a little more than one percent of mortgages are in foreclosure that is up from one-half percent in 2006.

It may seem small, but it is a huge leap, especially when our economy was very much dependent on the housing boom, and the bust has left us looking at a recession. The ramifications have had a domino effect and everyone will be affected, including mortgage brokers.

[goodbyehollywood]

I have to wonder-- when did this bailing out people who exercised poor judgment start... and when will it stop? Gambling on a house or a mortgage is no different than gambling at black jack-- and the repercussions should be the same. If you play it wrong, you lose, and if you lose, it's your money being whisked away. I understand (and agree with) the domino effect and global interconnectivity yada yada, but where does excusemaking stop and accountability begin? You can keep adding chairs, but sooner or later, the music is going to stop and not everybody will end up with one. The sooner the shakeout can begin in earnest, the sooner the market will bottom and stabilize. It sounds callous, but it's simply free market economics and we either live in a free market economy or we don't.

I can't quite figure out why Tennessee is so high on any foreclosure list. If those subprime loans weren't prevalent here, then presumably the buyers were qualified. And appraisals weren't routinely inflated. (In fact, my appraisal was too conservative.) These foreclosees couldn't have all lost their jobs, faced a medical calamity or suffered unexpected financial reverses. So why is TN #11?

And here's a naive suggestion-- why don't lenders show their appreciation for the honest borrowers who pay their mortgage on time by lowering their rate a smidgen... instead of holding timely borrowers to higher rates while falling all over themselves to lower the rates of those facing foreclosure? Yeah, that'll happen... right about the time I see a pig flying past my office window.

[yarddawg]

Originally Posted by goodbyehollywood

I can't quite figure out why Tennessee is so high on any foreclosure list. If those subprime loans weren't prevalent here, then presumably the buyers were qualified. And appraisals weren't routinely inflated. (In fact, my appraisal was too conservative.) These foreclosees couldn't have all lost their jobs, faced a medical calamity or suffered unexpected financial reverses. So why is TN #11?

My understanding is that the paperwork is done somewhat differently here than in some other states. The bank usually includes a clause (in the deed of trust) which allows them to foreclose and sell the property without going to court if you become delinquent in your payments. So it's fast and easy. I know of a few cases in which the house was foreclosed and auctioned on the courthouse steps 30 days after the loan went delinquent but I don't know if that's a typical timeline. I've also been told that's not so much legal in some other states and foreclosures drag out for months before being final. Not my area of expertise but if my information is accurate I'm not sure how well you can compare foreclosure rates state-to-state over the short term.

[goodbyehollywood]

Well, that is different. In CA, it could take at least a year to initiate proceedings-- maybe more-- and banks aren't at all eager to do it. Thirty days doesn't give people long to get back on their feet. If that is, indeed, the case, then foreclosures would be higher here. Thanks for the info!

[Beretta]

In Texas there is the homestead law and all that goes with it. (not everyone is protected by the law, but that is another post) This does, however, play into the statistics as the homestead law does delay and/or prevent foreclosures. Circumstances such as these skew the data both ways.

[mbmouse]

Originally Posted by yarddawg

My understanding is that the paperwork is done somewhat differently here than in some other states. The bank usually includes a clause (in the deed of trust) which allows them to foreclose and sell the property without going to court if you become delinquent in your payments. So it's fast and easy. I know of a few cases in which the house was foreclosed and auctioned on the courthouse steps 30 days after the loan went delinquent but I don't know if that's a typical timeline. I've also been told that's not so much legal in some other states and foreclosures drag out for months before being final. Not my area of expertise but if my information is accurate I'm not sure how well you can compare foreclosure rates state-to-state over the short term.

The way I understand it. In TN, yes, a bank can START foreclosure procedures on the 31st day after a missed payment. Do they? Usually not, it is more like 120 days. Why? Because TN is a non-recourse state, which means if the bank auctions off a house that has a 150k mortgage owning on it for 100k the bank can not go back to the one who defaulted on the loan in the first place for the extra 50K. (not to say they won't put it on your credit, they will!) Not all states are like this. That is however why you will get a 0.50% higher start rate in TN than in a recourse state.
My assumption on the high foreclosure rate is mobile home dealers doing land contract type deals at 16% plus interest rates. I see a lot of mobile foreclosure in certain counties in TN. The other is speculating builders. Do you know how easy it is to form an LLC, get a loan to build a spec development type homes, they don't sell in 90 days then foreclose and walk away? The LLC files bankruptcy, the primaries walk away clean. Scary. Not to say there weren't plenty of people trying to keep up with the Jones, and just couldn't. Gambled on the ARM's and lost. I am sure there are a lot of those too. But that was when lenders were giving money way, now they cry to the Gov. becuase they don't get it back...hello!
"Hey Uncle Sam, I loaned 80 grand to someone I just met, but they looked like nice people, they now won't pay me back, so can you give it back to me please?"

[gemkeeper]

Regardless of the laws, however, GBH is correct when asking when are the banks, mortgage companies and society in general, going to hold people responsible for their own poor judgment.

Most people know that even with that cost of living increase coming in March, and the yearly job review that might give one 3 -5 % more in the paycheck, they are still going to be stretched farther than a sling shot when that ARM comes due.

I don't think that they were all waiting for Aunt Matilda to kick the bucket and bail them out! (Hik - bucket and bail in the same sentence!)

A grownup has to act like a grownup and accept the penalty of not doing one's homework, playing against the odds, or just being plain irresponsible.

We pay all of our bills at the end of the month and even if it would be one of my kids (ok, I would help my kid), I would want them to stand up and take the consequences of a selfish decision. Because, in many cases, these decisions (not based on statistics, just observing human nature) are selfish people wanting to get as much as they can on the "pay for it later" plan.

Good thought, GBH, let the mortgage lenders work out reasonable, but higher than original, interest rates for all of these potential foreclosures. They are hurting us all and will continue to do so for a long time to come. Find a way that they pay their way without losing their homes and do it so that it is fair to all.

[mbmouse]

Originally Posted by gemthornton

A grownup has to act like a grownup and accept the penalty of not doing one's homework, playing against the odds, or just being plain irresponsible.

I have to say it...I know I shouldn't but I just HAVE too!
You are asking this question, but what have they been teaching in all of the schools for the past 15 or so years? "Everyone is a winner, there are no losers if you just participate."
The people reap what they sow as a whole.
Can you imagine what will happen in the next 20 years economy wise when all those who were "taught to the test" as to how to fill in the bubble are our main work force?