Hunt for True October Foreclosure Trend (Short sale foreclosure)
released Thursday shows that Notices of Default in California sunk 44 percent from a year ago in October. A new California law that took effect in early September requires lenders to provide homeowners an extra 30-day notice before filing a Notice of Default. While California has had the most impact on the national numbers because of its size, other state foreclosure trends that were headed upward have taken a sharp turn down after legislation designed to extend or forestall the foreclosure process was passed.
Below are three graphs using a 90-day rolling average of RealtyTrac numbers. Each month’s average is based on the total for that month and the totals for the month before and the month after. So the most recent rolling average available is for September.
The foreclosure trend in California abruptly stopped its upward climb after the new law took effect in September while the upward foreclosure trend in Florida has continued.
Foreclosure trends in Maryland and Massachusetts both switched directions after new legislation forestalling foreclosure took effect, although the trend recently started heading back up.
Colorado foreclosure activity began a steady downward decline in January, after a new law extending the foreclosure process took effect. A similar trend began more recently in New York.
Source: foreclosurepulse.com
Fed Calls Another Running Play at Fourth and Goal
Looking at fourth down and goal with time running out, and having resorted to every trick in the playbook, including lending billions to help out the nation s and the world s struggling financial systems, Ben Bernanke and his team over at the Federal Open Market Committee tried a run up the middle one more time Wednesday, lowering the ever-popular federal funds rate by half a percent to 1 percent.
A huge rally on Wall Street the day before (almost 900 points) anticipated the cut, although some analysts were hoping for more than 50 basis points. More importantly, many are looking for this move to signal the lowering of mortgage rates to help out struggling homeowners trying desperately to stay in their homes.
In its official statement, the Federal Open Market Committee for the first time in many months did not cite the nation s continuing housing contraction as one of the primary reasons for the cut.
This time the committee is citing a decline in consumer spending, slow economic activity overseas and the intensification of financial market turmoil as key concerns. AND, the committee seems to be patting itself on the back this time for all of its recent policy decisions, although it still admitted that downside risks to growth remain.
As The New York Times is reporting, the Commerce Dept. released its report on consumer spending this morning and the news is not good. Personal consumption for Q3 2008 fell at an annual rate of 3.1 percent, the biggest drop since 1980, when the economy was in a deep recession.
Jobs are being cut all over the country, people are losing their homes to foreclosure and credit card debt is out of control. All told, many analysts are already declaring that the American economy is now officially in a recession.
According to figures provided by the Federal Reserve, consumers in this country have charged up $900 billion in credit card debt. The Associated Press reported in BusinessWeek this week that the Financial Services Roundtable, a financial industry alliance, and the Consumer Federation of America have joined forces in asking federal regulators to do something to reduce consumer credit card debt by as much as 40 percent.
Between credit card debt and a full-blown mortgage crisis on its hands, the Fed is less worried about inflation at this juncture and more focused on the reluctance of banks to loan money, according to the Times.
Whether this is the Fed s last hurrah before a new administration takes office in January or not remains to be seen. Still, the next president is going to inherit many problems, and a glut of foreclosures appears to be one of them.
Potential homebuyers and real estate investors looking for bargain properties will probably have at least all of 2009 and maybe even 2010 to shop around. There is obviously more pain to come before we see daylight at the end of this tunnel.
What do you think about the Fed s latest move? Will it make a difference where you live in terms of reducing foreclosure activity? We d like to hear your opinion.
Source: foreclosurepulse.com
Tags: Ben Bernanke, Billions, California Law, Early September, Federal Funds Rate, Federal Open Market Committee, Foreclosure California, Foreclosure Process, Graphs, Half A Percent, Lenders, National Numbers, New California, New Legislation, Notice Of Default, Open Market Committee, Playbook, Running Play, Sharp Turn, State Details