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Top 20 New-Wave Foreclosure Markets

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After five straight quarterly drops, default notices that start the foreclosure process increased 14 percent nationwide from the second quarter to the third quarter of 2011, signaling that another wave of foreclosure activity is beginning in many parts of the country. Although this wave will probably not crest as high as the foreclosure wave of 2007 to 2010 that resulted in more than 3 million borrowers losing their properties to foreclosure, it comes on the heels of a temporary lull in foreclosure activity caused by foreclosure processing delays over the past year.

This new wave of foreclosures is hitting some markets particularly hard. Below are graphics showing the 20 markets nationwide with the biggest quarterly increase in new foreclosure starts in the third quarter.

Check the foreclosure trends in your area in our Foreclosure Stats & Trends Center, or find new foreclosure properties in your neighborhood with our free nationwide foreclosure property search.

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well well- yes the market is still tanked, but sorry to say =(, someones misfortunes is someone elses fortune gainer... In my case i made more money this last 4 years in forclosed housing than the 6 years in new construction b4 2007... havn't Americans learned anything from economic history ???, we are on a ecomomic roller coaster, pay attention to the older experts, not the blow smoke up your shirt fakers. the other thing is Americans need to learn how to work hard again to get what they want, not rely on credit and expectation that the Gov. will take care of US.. my father used his strength and whits to get the American dream and never relyed on the Gov. to give him what he wanted all with teaching himself English and living the dream coming from over seas. He taught me and my siblings that very will also.. Our schools should have classes on that very same thing, maybe the next generation will get it somewhat better than this generation in power...FMF Posted: November 10, 2011 by: Frank F
crewscontrol: you also might be on to something. I noticed in our county-level data in California yesterday that many of the coastal counties, where the real estate market is presumably more stable, we are seeing even bigger increases in defaults. And not just increases from the previous month, but increases from the previous year. For example, Orange County NODs increased 72 percent from September to October and were up 34 percent from a year ago. Santa Barbara County NODs increased 65 percent from September to October and were up 20 percent from a year ago. Posted: November 10, 2011 by: darenb
Could it be that the mortgage companies see an end to these stagnant local real estate markets? Are they are now taking possession of properties because they don't expect to hold the properties for long periods paying taxes and POA fees? Posted: November 10, 2011 by: crewscontrol
I think classiclady is on to something. I think there may be a shift in attitudes about homeownership that will lead to more healthy patterns in the housing market. PMFog: The toxic loans did not vaporize, but many of them were foreclosed over the last few years. We've seen a total of 3.9 million REOs since this foreclosure crisis began in earnest in 2007. In addition, many of the toxic loans still out there have not blown up as some expected because interest rates have been kept so low. I agree this new wave of defaults we're seeing start the foreclosure process will move through the process faster than those started over the past 12 months, but I don't see the lenders returning to the peak of more than 100,000 REOs a month that we saw in September 2010, right before robo-signing hit. Posted: November 9, 2011 by: darenb
Hmm. Daren, I think there is more to the observed decline in foreclosures than the market having somehow vaporized the absolutely staggering value of "toxic loans". Both Freddie and Fannie are asking for about $6 billion each in bailouts for 3RD QUARTER 2011 LOSSES, with more to come. I agree with your "underwater borrowers walking" as focused on the right group, but have a read of the brief Bloomberg BusinessWeek article at this link: The conclusion here is that the seriously delinquent loans will be foreclosed at an ever faster pace once the banks get the "me too" elected Attorneys General to admit borrowers can't just keep the money and go away. Ever longer unemployment and more job losses add fuel to the fire. Posted: November 9, 2011 by: PMFog
Well folks perhaps we should look back to see the future. Many of you maybe younger than I but I remember my grandpareants living in their homes until the day they died and in all that time never being concerned with what the value of their home was. They bought their homes to raise a family in. My youngest just paid over half a million for a home and I just wanted to die. Worried about his future and telling him of my concern he said, "Mom I plan to live in this house for the rest of my life and God willing, to raise my children here. I will do what ever is necessary to hold on to it and work for the next 30 years to pay it off, if thats what it takes." Now boys and girls that IS the American way. Perhaps now we have to educate our clients to think like that again!! A house should not be an investment to make money can't be that any longer. It is now an investment in a families future. Americans will have to start thinking more about pride in ownership, neighborhood and country!! Posted: November 9, 2011 by: classiclady
But on the brightside, atleast Albuquerque seems to be doing well.... (much needed comedic relief) The bottom line is that we are 3-5 years away from true transparency in the real estate the market, but the good news is that the dollar will be worthless by then so you will be paying the bank back pennies on the dollars for what you purchased. Net takeaway, buy good properties when you find them. Good luck all! Posted: November 9, 2011 by: PushingPaper
The next wave/s can only be larger. This is an extreme crisis, the likes of which have never been seen. When the smoke clears, what will we have? The entire system will be in different order. We have billions in losses to the banking system. Billions of losses of equity and retirement for the people---starting with the fake stock market to the fake real estate equity through fake lending. We are a house of cards in a big wind. The banks/servicers holding onto these properties will fair well, as our (YOURS, I dont like to claim it) government floats and relieves them of loss. The smoke will eventually clear to a new order of things. We have un done ourselves. No longer a world leader. No longer an economic super power. Yeah, we have a lot of nooclear (thanks, GWB) weapons but I dont think some of the other countries will be bluffed as easily as in the past. So now the owners of real estate can look foreward to def judgements, IRS 'relief of debt' tax, various lawsuits, etc. Think of the suits for mis stating income or flat out lying about occupation, etc on 1003s! So far hundreds of mortgage companies have been falling to FBI investigators but big deal. Their fines and jail time fixes nothing. Real estate prices must continue to fall. They WILL fall. One can tell what they will be in any given area. If the economic base is driven by Joe and Jane Average, thats the INCOME BASE that determines who can afford what. Joe and Jane still cant afford to buy a home. Maybe we need a replacement for real estate as the American Dream. Posted: November 9, 2011 by:
RJFloida, I definitely would not walk away from the deal you describe especially in Florida where I hear the banks are starting to go after people for deficiency judgements. How does it help you to walk away and still owe the bank $300k? If you stayed in the house at least you still have some hope that the value would rise in the future. Posted: November 9, 2011 by:
DarrenB and others: Exactly. You cannot expect someone to pay for the next 30 years on a house that will never be worth what they paid for it. Every single underwater home *WILL* see a strategic default within the next 5 years. That will easily dwarf 2007. Just ask yourself: Would YOU pay 400k for a house that is now worth 100k? What kind of idiot would do something like that? If you wouldn't do it why should any thinking person expect them too? Posted: November 9, 2011 by: RJFloida
That's an interesting perspective on the commercial market. I was just at an Economic Outlook event on Monday night where the speakers were claiming the commercial real estate market did not have the price bubble and overbuilding like the residential market and so should not be hit as hard. Posted: November 9, 2011 by: darenb
Just wait for the commercial market, its coming too. With rents reduced by as much as 50%, making loan to value ratios imposible to refi the commercial market is in for the same thing. GLTA Posted: November 9, 2011 by: JKHolroyd - BCDH
Thanks for your comments Purple Pinto. The reason we don't think in terms of sheer numbers the foreclosures will be as high nationwide as 2007 to 2010 is that we are largely through the worst of the toxic loans that triggered the initial foreclosure wave. The foreclosures coming down the road will be economic/unemployment driven for the most part. The big wildcard of course is how many more underwater borrowers will just decide to walk away from their mortgages. That could make this next wave much bigger. Posted: November 9, 2011 by: darenb
So I'm not crazy. I suppose that is some small solace when I see my town on the top of the list at 151% increase. I've been looking for properties with buyer/investors and the inventory has been absolutely minimal, while the Ocwen pre-foreclosure appraisal requests have increased substantially. Markets and sectors of markets that hadn't experienced a decline in several years have begun to slip down and in a big way. I think this one is going to be very ugly. I don't see the 'not as bad as 2007' hope that the article's author sees. The economic fixes are far from 'in', the EU is crumbling, Bernanke's printing press has been thankfully stopped and no current threats of QE3, but the sugar fix solutions have all been tried and failed. Three years of basically band aid fixes and no real reform or restructuring that was necessary. Thanks to Timmy Geithner, Ben Bernanke and the Obama crew. Fools. Posted: November 9, 2011 by: Purple Pinto 918-852-2146 Posted: November 9, 2011 by: ihaultulsa

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