National Home Foreclosures

[Boffin]

As the cost of living in the U.S. continues to climb, foreclosures are also on the rise.

May foreclosure-related filings, which include default notices, scheduled auctions and bank repossessions, were up 7% from April and up 14% from a year ago, to 35,196 properties, according to the real estate data group ATTOM.

Lenders began the foreclosure process on 23,245 properties in May, up 4% from last month and up 5% from a year ago. States with the most foreclosure starts in May included Florida, where 2,901 foreclosures got underway, followed by California, with 2,451 foreclosures started, and Texas, where 2,286 properties fell into the foreclosure column.

[Stu from NYC]

Where are these numbers from?

[Boffin]

Where are these numbers from?

You did read: “ …according to the real estate data group ATTOM.” Right?

[retiredguy123]

The way to avoid foreclosures is to require a 20 percent down payment to buy a house.

[Boffin]

Probably not.

[CoachKandSportsguy]

The way to avoid foreclosures is to require a 20 percent down payment to buy a house.

not sure how that relates to losing income to pay the mortgage, there are many ways which the average person can fall into a financial hole including an employment hole, and have a hard time paying a mortgage.

Both my prior boss and i were out of work for 3 years at different points in our lives, and not for lack of trying to get a job. . I even was hauled to court for not being able to pay child support, and again not for lack of trying. .

[retiredguy123]

not sure how that relates to losing income to pay the mortgage, there are many ways which the average person can fall into a financial hole including an employment hole, and have a hard time paying a mortgage.

Both my prior boss and i were out of work for 3 years at different points in our lives, and not for lack of trying to get a job. . I even was hauled to court for not being able to pay child support, and again not for lack of trying. .
I didn't say that it did. But, people who make a 20 percent down payment are much more likely to avoid a foreclosure, when the cost of living increases, than those who have little or no equity in their house. Obviously, if you depend on your income to make mortgage payments, and you lose your job, you cannot make the payments.

[OrangeBlossomBaby]

I didn't say that it did. But, people who make a 20 percent down payment are much more likely to avoid a foreclosure, when the cost of living increases, than those who have little or no equity in their house. Obviously, if you depend on your income to make mortgage payments, and you lose your job, you cannot make the payments.

Which means that requiring a 20% downpayment doesn't make it more likely do do anything at all - other than make someone lose more, when their circumstances change and they're no longer able to pay for their mortgage.

If you don't depend on your income to make mortgage payments, you're less likely to need a mortgage in the first place.

We had almost all of our principal paid on our home up north, and were paying back a home equity loan to cover the cost of a roof replacement. And then - the company closed shop and put beloved spouse out of a job in a skilled trade where new-hires now come in at just barely higher than minimum wage. So he couldn't get a replacement job. We were going to move only 2 years later, but when the company pulled the plug we knew that we'd already be in foreclosure by then. That's why we came here when we did.

We had to sell our home and move to Florida to prevent foreclosure.

[Caymus]

Where are these numbers from?

This is an article from my newsfeed that mentions ATTOM.

Home foreclosures are rising nationwide, with Florida, California and Texas in the lead (https://www.nbcnews.com/business/economy/home-foreclosures-rising-in-us-where-which-states-rcna88394)

[Pairadocs]

not sure how that relates to losing income to pay the mortgage, there are many ways which the average person can fall into a financial hole including an employment hole, and have a hard time paying a mortgage.

Both my prior boss and i were out of work for 3 years at different points in our lives, and not for lack of trying to get a job. . I even was hauled to court for not being able to pay child support, and again not for lack of trying. .

I recently read that a significant uptick in FL foreclosures resulted from Ian, and in ways I had never suspected ! Stories I won't try to regurgitate here, but linked to how FEMA works (and doesn't work !) for so many people, people who thought they did everything right, paid high premiums to be fully insured, and so on. But, I had no idea that if the damage is even 1% OVER the 50% allowed (by FEMA as I understand it), then the structure must be repaired and rebuilt to much stiffer and much more expensive standards. Apparently many seniors who have been retired in the Sarasota and surrounding area, experienced over 50% damage, but even with full "replacement" value, the insurance checks fell far far short of the cost of building to the increased standards. Kind of between a "rock and a hard place", especially for people now on a fixed income. I DO understand that allowing these people to rebuild using only the "replacement cost" as per the insurance policy, minus FEMA requirements, does expose ALL of us to even higher rates should they have this happen again and did not have to rebuild to the new standards.... but, I also see "the other side of the coin", not knowing how we could rebuild if our "replacement cost" insurance did not cover the government's newest building requirements ! Many foreclosures on properties with significantly damaged homes. Have good friends who were fortunate, their lanai, pool, and one wing of home were under considered 30% so they were able to rebuild with the money their insurance provided. Their next door neighbors in the same development, experiences 60% damage, just 40 feet away !

[CoachKandSportsguy]

I recently read that a significant uptick in FL foreclosures resulted from Ian, and in ways I had never suspected ! Stories I won't try to regurgitate here, but linked to how FEMA works (and doesn't work !) for so many people, people who thought they did everything right, paid high premiums to be fully insured, and so on. But, I had no idea that if the damage is even 1% OVER the 50% allowed (by FEMA as I understand it), then the structure must be repaired and rebuilt to much stiffer and much more expensive standards. Apparently many seniors who have been retired in the Sarasota and surrounding area, experienced over 50% damage, but even with full "replacement" value, the insurance checks fell far far short of the cost of building to the increased standards. Kind of between a "rock and a hard place", especially for people now on a fixed income. I DO understand that allowing these people to rebuild using only the "replacement cost" as per the insurance policy, minus FEMA requirements, does expose ALL of us to even higher rates should they have this happen again and did not have to rebuild to the new standards.... but, I also see "the other side of the coin", not knowing how we could rebuild if our "replacement cost" insurance did not cover the government's newest building requirements ! Many foreclosures on properties with significantly damaged homes. Have good friends who were fortunate, their lanai, pool, and one wing of home were under considered 30% so they were able to rebuild with the money their insurance provided. Their next door neighbors in the same development, experiences 60% damage, just 40 feet away !

interesting stories! I wouldn't have thought anything about the rebuild to higher standards.

I will say one observation: we spent a week vacationing south of tampa near siesta key, and the traffic on 70 was ridiculous every day, south in the morning of contractor trucks towards Fort Myers / Naples and back home north in the late afternoon. . day after day, all contracting trucks and trailers

So the world can be counter intuitive for sure. .

20 days until retired finance guy

[eyc234]

As the cost of living in the U.S. continues to climb, foreclosures are also on the rise.

May foreclosure-related filings, which include default notices, scheduled auctions and bank repossessions, were up 7% from April and up 14% from a year ago, to 35,196 properties, according to the real estate data group ATTOM.

Lenders began the foreclosure process on 23,245 properties in May, up 4% from last month and up 5% from a year ago. States with the most foreclosure starts in May included Florida, where 2,901 foreclosures got underway, followed by California, with 2,451 foreclosures started, and Texas, where 2,286 properties fell into the foreclosure column.

:shrug: So what! My house is paid for and I live in the greatest place on earth. Been thru this multiple times and it did nothing to us.

[jimbomaybe]

I recently read that a significant uptick in FL foreclosures resulted from Ian, and in ways I had never suspected ! Stories I won't try to regurgitate here, but linked to how FEMA works (and doesn't work !) for so many people, people who thought they did everything right, paid high premiums to be fully insured, and so on. But, I had no idea that if the damage is even 1% OVER the 50% allowed (by FEMA as I understand it), then the structure must be repaired and rebuilt to much stiffer and much more expensive standards. Apparently many seniors who have been retired in the Sarasota and surrounding area, experienced over 50% damage, but even with full "replacement" value, the insurance checks fell far far short of the cost of building to the increased standards. Kind of between a "rock and a hard place", especially for people now on a fixed income. I DO understand that allowing these people to rebuild using only the "replacement cost" as per the insurance policy, minus FEMA requirements, does expose ALL of us to even higher rates should they have this happen again and did not have to rebuild to the new standards.... but, I also see "the other side of the coin", not knowing how we could rebuild if our "replacement cost" insurance did not cover the government's newest building requirements ! Many foreclosures on properties with significantly damaged homes. Have good friends who were fortunate, their lanai, pool, and one wing of home were under considered 30% so they were able to rebuild with the money their insurance provided. Their next door neighbors in the same development, experiences 60% damage, just 40 feet away !

From Motley fool link, Typical single-family home value in the first quarter of 2023: $383,063
Median household income as a percentage of home value: 16%
The typical home in Florida is priced 15% higher than the typical U.S. home and the median household income in the state is 10% lower than the median U.S. income, resulting in a low income-to-home-value ratio and generating affordability concerns.( I would think the higher percentage of retired people here would modify the impact)
All the retirees arriving drive up home prices but at the same time bring money into the economie being spenders not taking jobs, significant dip in interest rates fueled a buying spike, encouraging some to bite off more than they could chew, phycology of boom and bust

[Two Bills]

The problem is people borrow to the limit of their present income.
When prices, or interest rates rise, they have no extra finances to meet the new situation.
Borrow by all means, but give yourself a 10-15% increase leeway.
Always worked for us.


Retired non-financial guy.:icon_wink:

[Ellwoodrick]

Having worked in the Real estate industry for over 30 years as a Real Estate Appraiser in Western Pennsylvania I have been in many REO (Foreclosed) properties. Many before they were trashed out. The amount of damage, neglect and filth would indicate the occupant just did not care. Not true of all but of most of them. You don't have to be rich to clean.

[spinner1001]

As the cost of living in the U.S. continues to climb, foreclosures are also on the rise.

May foreclosure-related filings, which include default notices, scheduled auctions and bank repossessions, were up 7% from April and up 14% from a year ago, to 35,196 properties, according to the real estate data group ATTOM.

Lenders began the foreclosure process on 23,245 properties in May, up 4% from last month and up 5% from a year ago. States with the most foreclosure starts in May included Florida, where 2,901 foreclosures got underway, followed by California, with 2,451 foreclosures started, and Texas, where 2,286 properties fell into the foreclosure column.

It’s complicated. In the USA, the unemployment rate is near an all time low yet foreclosures are higher according to OP’s information. What gives? Household demographics is a factor in the number of foreclosures.

People are making personal choices that affect the likelihood of home foreclosure over time. The average household size is near an all time low. Many people choose to live alone and don’t have a partner for a second income when personal circumstances change. Also, the marriage rate is near an all time low and the trend of single parent homes has been rising for decades.

U.S. has world's highest rate of children living in single-parent households | Pew Research Center (https://www.pewresearch.org/short-reads/2019/12/12/u-s-children-more-likely-than-children-in-other-countries-to-live-with-just-one-parent/)

[Tonydivo]

A sign of the times

[Marine1974]

The way to avoid foreclosures is to require a 20 percent down payment to buy a house.

So my VA loans with 0 down and 2.399% 30 year fixed is not away to avoid foreclosure? My principal goes down $900 a month when I make my payment.

[Normal]

///

[Haggar]

As the cost of living in the U.S. continues to climb, foreclosures are also on the rise.

May foreclosure-related filings, which include default notices, scheduled auctions and bank repossessions, were up 7% from April and up 14% from a year ago, to 35,196 properties, according to the real estate data group ATTOM.

Lenders began the foreclosure process on 23,245 properties in May, up 4% from last month and up 5% from a year ago. States with the most foreclosure starts in May included Florida, where 2,901 foreclosures got underway, followed by California, with 2,451 foreclosures started, and Texas, where 2,286 properties fell into the foreclosure column.

Add to that the companies that bought second mortgages and HELOCs from banks that deemed them uncollectable are going after homeowners whose property values have increased to the point that these second "mortgages" are now collectible. WSJ journal had an article about a homeowner who was foreclosed by a company going after a mortgage - that with accumulated interest and costs came to $160,000. Homeowner had no idea he was still liable for the second. But - in fairness - why should the homeowner be able to walk about from debt he incurred?

[Stu from NYC]

You did read: “ …according to the real estate data group ATTOM.” Right?

OOPS another senior moment. People do take mortgages out they should not and banks are not the conservative lenders they used to be

[CoachKandSportsguy]

I didn't say that it did. But, people who make a 20 percent down payment are much more likely to avoid a foreclosure, when the cost of living increases, than those who have little or no equity in their house. Obviously, if you depend on your income to make mortgage payments, and you lose your job, you cannot make the payments.

The stat is an origination filter statistic for house loans with an average life of 7-10 years. The 7-10 years is a stat for the average length of time that a mortgage was outstanding to collect interest before the house was sold or the loan was refinanced. . . again, just an historical stat.

In the current environment, which is now different than the prepandemic period, the low mortgage rate for those who refinance or purchased is fantastic. However, there were people who took mortgages at the very low level for a house they could only afford should circumstances never change. . . ie purchased too much house due to pandemic influenced availability and prices. .

so foreclosures reason segmentation is needed which is always difficult to find, if publicly available at all. . . and this example is how with just top line stats, the interpretations can be wildly different than the actual reasons, which may or may not be unique or isolated to specific events, such as hurricane Irma, or other events such as the purchase and collection of assumed deadbeat loans. .

data guy forever, even after corp financial retirement

[Normal]

Many houses in Florida were left uninhabitable after our storms last year. Perhaps some situations were in the “sunk cost” paradigm and there was little reason to rebuild or return to the nothingness of a wasteland. Maybe foreclosures on those properties was the best thing to happen.

[eweissenbach]

Possibly a significant number of foreclosures were caused by taking low interest ARM loans of which the interest rate increases rendered them unaffordable for the borrowers.

[CoachKandSportsguy]

Possibly a significant number of foreclosures were caused by taking low interest ARM loans of which the interest rate increases rendered them unaffordable for the borrowers.

good point! also a segment of the foreclosures which would be financial rate for those who didn't refinance the ARM when rates were low. we purchased in 2018/2019 with a 5 year ARM at 4.5 rounded, refinanced for 3% in the january 2021when the rates were at rock bottom. .

There was a foreclosure in TV and the couple divorced or something, unknown reason, and they just abandoned the house. . didn't even try to sell it. . weird. . and with a 20% down payment, that was like 80K they threw away

all is fine until humans get involved. . just strange. .

[Stu from NYC]

good point! also a segment of the foreclosures which would be financial rate for those who didn't refinance the ARM when rates were low. we purchased in 2018/2019 with a 5 year ARM at 4.5 rounded, refinanced for 3% in the january 2021when the rates were at rock bottom. .

There was a foreclosure in TV and the couple divorced or something, unknown reason, and they just abandoned the house. . didn't even try to sell it. . weird. . and with a 20% down payment, that was like 80K they threw away

all is fine until humans get involved. . just strange. .

Fine line between love and hate, bet one of the partners really wanted to hurt the other financially

[manaboutown]

///

[retiredguy123]

So my VA loans with 0 down and 2.399% 30 year fixed is not away to avoid foreclosure? My principal goes down $900 a month when I make my payment.
I know you won't agree, but I think the VA loan program, which is promoted as a "benefit", actually does a disservice to a lot of military people, especially young people. They buy a house with no money down, get a car loan, buy a lot of furniture and other things for the house, all with the premise that they are making a good investment. Unfortunately, many of them are never able to get out of debt, even if they are able to avoid foreclosure, which many are not. Not a good lesson in financial planning. Clark Howard, my hero cheapskate, and a military reservist, has given a lot of lectures on financial planning to his fellow military members. He has become a millionaire many times over by avoiding debt.

[Stu from NYC]

I know you won't agree, but I think the VA loan program, which is promoted as a "benefit", actually does a disservice to a lot of military people, especially young people. They buy a house with no money down, get a car loan, buy a lot of furniture and other things for the house, all with the premise that they are making a good investment. Unfortunately, many of them are never able to get out of debt, even if they are able to avoid foreclosure, which many are not. Not a good lesson in financial planning. Clark Howard, my hero cheapskate, and a military reservist, has given a lot of lectures on financial planning to his fellow military members. He has become a millionaire many times over by avoiding debt.

Very true. Some debt can be a good thing but too much is an albatross

[CoachKandSportsguy]

Very true. Some debt can be a good thing but too much is an albatross

Only debt with tax deductible interest which doesn't exceed the limit, and when interest rates are below the rate of inflation, negative real rates, is some debt OK. .

but borrowing to the max percentage of income lenders will give is not a plan for success unless its a very short term debt instrument.

He has become a millionaire many times over by avoiding debt.

Which is why one should pay off the bond if there is no expectation of moving in the next 10 + years. . :popcorn:

[ChrisTee]

I know you won't agree, but I think the VA loan program, which is promoted as a "benefit", actually does a disservice to a lot of military people, especially young people. They buy a house with no money down, get a car loan, buy a lot of furniture and other things for the house, all with the premise that they are making a good investment. Unfortunately, many of them are never able to get out of debt, even if they are able to avoid foreclosure, which many are not. Not a good lesson in financial planning. Clark Howard, my hero cheapskate, and a military reservist, has given a lot of lectures on financial planning to his fellow military members. He has become a millionaire many times over by avoiding debt.

Right on Retiredguy123. I'll add that back when we had a need for a mortgage, VA loans were too expensive. Yes - they always cost more than a well shopped non-VA mortgage. I tried to use my VA loan benefit, but it was always too costly. Your points about putting very little $ down on a home being a contributor to financial problems is also true. The measure of one's assets, (especially liquid assets) to liabilities really impacts how well someone is likely to navigate life's $ challenges.
- Retired before 50 by saving often and spending less. Now it's playtime.