Sanding our assholes with 150 grit.

Foreclosures up 47% nationwide

..compared with this time last year.  They're up 56% in North Carolina.

http://www.newsobserver.com/104/story/565650.html

So there will likely be a ripple effect of this, both upwards into the sub-prime markets (although the article doesn't specifically say this is in the sub-prime markets, there's a good chance that's where this is happening), and into the local economies as people move.
Permalink xampl 
April 19th, 2007 4:00pm
Behind the curve dude.  This is last week's news.
Permalink Send private email Clay Dowling 
April 19th, 2007 4:26pm
How long does it take for them to start foreclosure proceedings.  Meaning, how long before does the home-owner stop paying his house note before they start to take it away.
Permalink Bot Berlin 
April 19th, 2007 4:29pm
TFA says 90 days.  But think it's a little bit longer if you're otherwise a responsible person.
Permalink xampl 
April 19th, 2007 4:45pm
and once forclosure proceedings start, it's another few months before you're actually kicked out.
Permalink the great purple 
April 19th, 2007 5:15pm
interesting.
Permalink Bot Berlin 
April 19th, 2007 5:22pm
indeed.
Permalink Send private email Wayne 
April 19th, 2007 5:32pm
Hmm.  Only 47%?  So if this time last year it was 100, this time this year it's 150?

I think we need the absolute numbers on this one.  150 I'm not going to be concerned about.  2 million I am.
Permalink SaveTheHubble 
April 19th, 2007 5:56pm
Ah, and having read the article, it's 150,000, instead of 100,000.

Funny, I don't think 50,000 out of all the houses sold and families living in them (300 million people, let's say 3 per family, that's 100 million homes, minus renters, say 50 million homes.  50,000 / 50e6 is 0.1%.

My numbers must be wrong.
Permalink SaveTheHubble 
April 19th, 2007 5:59pm
And re-reading the article, again it looks like 1 in 1000 homes got foreclosed, or 0.1%.

Interesting use of statistics there.

"Wow!  Forclosures are up almost 50%!  Crisis!

Oh, by the way, normal foreclosures are vanishingly small.  And with this increase, we're now foreclosing on ONE in a THOUSAND homes."

Yeah, the dust-bowl and Grapes Of Wrath this isn't.  Forgive me if I don't panic just yet.  Don't get me wrong, I feel for those 1 in 1000 families who have to move into rentals now.  But let's keep some perspective, OK?
Permalink SaveTheHubble 
April 19th, 2007 6:04pm
It looks like the article comes from this press release:
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=2283&accnt=64847

There is a table at the bottom if you want more details.
Explanation of the abbreviations used in the table:
http://www.realtytrac.com/education/noframes/overview.html
Permalink Peter 
April 19th, 2007 6:32pm
Banks hate foreclosures, so in fact the number is nearly always a small proportion of bad loans.
Permalink Send private email Stephen Jones 
April 19th, 2007 7:14pm
Note by the way that the foreclosure figures are per month. So the actual rate is around 1.5% or just under 2 million a year.
Permalink Send private email Stephen Jones 
April 19th, 2007 7:20pm
Most of those subprime loans didn't even have down payments associated with them.

So, don't feel sorry for the occupants. They've been living in nice houses for a lot less than they would have to pay for renting, now they just move in someplace else. They haven't lost anything at all.
Permalink Practical Economist 
April 19th, 2007 9:24pm
There was another article that someone posted (maybe it was me?) that had an interview with one of the homeowners.  In it, they said something along the lines of: "No one told me that an ARM meant that my payment could go up"

Like I've said in the past, there is a lack of basic financial education in this country.  Not just balancing your checkbook (although that's needed too), but stuff like "Adjustable means it could go up or down depending on the interest rate the board of the Federal Reserve picks"
Permalink Send private email xampl 
April 19th, 2007 9:28pm
some of those people went into it with their eyes open.  some of those people were definitely misled by the mortgage brokers.

one of those groups definitely deserve our sympathy.

telling which is which is the hard bit.
Permalink zestyZucchini 
April 19th, 2007 9:55pm
In both cases, you have someone paying a subprime mortgage payment for a house that is half what they would pay for rent on the same property. They live there for 1-2 years, then they stop making payments for a minimum of 3 months. Then foreclosure is served. 3 or more months later foreclosure is complete and they are evicted. They can appeal this, and it can go on for sometime while they live in the property and pay nothing at all. Finally, after 6 months to 2 years of living in the house without having to pay anything, they move to another rental.

Overall, with the lower monthly payment followed by months of free housing, they pay 1/4 what they would have if they had rented. All of them come out far ahead in these deals from where they would be if they hadn't taken the no-money-down subprime deal.
Permalink Practical Economist 
April 19th, 2007 10:00pm
That's only if they can schedule their own deaths. With crappy credit ratings, they are doomed to paying thru the nose for years after that.
Permalink Send private email strawberry snowflake 
April 19th, 2007 10:16pm
except that their credit rating is trashed, they're likely to owe fees up the wazoo on top of their already big mortgage, their dream of house ownership is destroyed, not to mention the stress involved, the hardship caused by attempting to keep up with the payments, the shame involved in being unable to do so, the stress of trying to find a place to rent once their credit rating is crap and so on, and so forth, and suchlike...

honestly, do you _really_ believe that all of that is preferable to renting?  because if you do clearly you should yourself go through it just to save yourself some dollars.

personally I would choose to lose money on rent rather than put myself through all of that just to try and 'save' a few dollars.

now, some people presumably put themselves in that position with a full understanding of the risks, but others were equally clearly entirely misled as to both their options and the risk and so on.

but honestly, you have to be a total fuckwit to use "well, they made money over renting" as a defence against feeling sympathy for them.
Permalink zestyZucchini 
April 19th, 2007 10:23pm
except that their credit rating is trashed, they're likely to owe fees up the wazoo on top of their already big mortgage, their dream of house ownership is destroyed, not to mention the stress involved, the hardship caused by attempting to keep up with the payments, the shame involved in being unable to do so, the stress of trying to find a place to rent once their credit rating is crap and so on, and so forth, and suchlike...

honestly, do you _really_ believe that all of that is preferable to renting?  because if you do clearly you should yourself go through it just to save yourself some dollars.

personally I would choose to lose money on rent rather than put myself through all of that just to try and 'save' a few dollars.

now, some people presumably put themselves in that position with a full understanding of the risks, but others were equally clearly entirely misled as to both their options and the risk and so on.

but honestly, you have to be a total fuckwit to use "well, they made money over renting" as a defence against feeling sympathy for them.
Permalink zestyZucchini 
April 19th, 2007 10:23pm
In plenty of cases they don't speak English and have been  lied to by the realtor, who has filled in false information on the loan application.

And in general they've been paying a lot more than they were paying for rent, especially as the property was also often overvalued.
Permalink Send private email Stephen Jones 
April 19th, 2007 10:50pm
"With crappy credit ratings, they are doomed to paying thru the nose for years after that."

Not really. People with good ratings don't get those sorts of mortgages. They got those mortgages because they already had bad credit.
Permalink Practical Economist 
April 19th, 2007 10:55pm
<shrug> thats just not true.  people with perfectly good credit ratings but insufficient income to cover the mortgage they wanted also ended up on these stupid things.



even if it was true it didb't exactly destroy my other point.
Permalink zestyZucchini 
April 19th, 2007 11:01pm
OK, so for those people, their credit is worse and their next mortgage will be more expensive.

But they will still get all the credit card offers they can handle. People who declare bankruptcy get new credit card offers the next day.
Permalink Practical Economist 
April 19th, 2007 11:19pm
...and that is relevant because...what?


so you are saying that its fine if these people have been ripped off, put under immense stress and had their credit rating trashed because they can still get credit cards?

or what, exactly, are you saying?
Permalink zestyZucchini 
April 20th, 2007 12:18am
They didn't get ripped off. They got a mortgage they couldn't afford, didn't understand the terms, and now they are defaulting.

Ripped off is when you buy a car and it's a lemon and you can't get your money back. Or you send money for product A and get product A-10 instead, and there are no refunds.
Permalink Practical Economist 
April 20th, 2007 1:31am
Saying they were ripped off would be like me buying a bunch of shit on my credit card, then realizing I couldn't afford it and not paying my bills and then saying "Those credit card companies are ripping me off! I'm a victim!"
Permalink Practical Economist 
April 20th, 2007 1:32am
Dear Practical Economist,

If you bought your brains I would say you have a good case for a chargeback.

In many cases the people that were scammed with these loans were told they would only have to pay so much per month, and that it would go down when refinancing occurred. As they couldn't speak English, let alone read legalese, they fell for it.

To say that is the same as buying something when you know the price and then finding you can't afford it is not true.

To make things worse some of the people actually had subsidised rented housing they lost when they bought the houses.

Buying an empty house to save rent is a non-starter in most cases. Work out the cost of buying furniture you're going to junk afterwards for a starter.
Permalink Send private email Stephen Jones 
April 20th, 2007 8:33am
Don't speak english is a red herring. How many subprime loan holders in the US don't speak english? 1/10 of 1%? ANd even if you don't speak english and you sign a contract you can't even read, whose fault is that? Yours!
Permalink Practical Economist 
April 20th, 2007 2:52pm
----"How many subprime loan holders in the US don't speak english? 1/10 of 1%? "----

Having fun with statistics today PE aren't we? The majority of sub-prime loans go to minorities, either Afro-American or Latino.

In Boston 54% of the loans went to Latinos. I think the proportion with deficient English is likely to be higher than 1/10 of 1%, don't you?
Permalink Send private email Stephen Jones 
April 20th, 2007 7:31pm
So you're saying that blacks and latinos don't speak english? Don't be retarded.
Permalink Practical Economist 
April 23rd, 2007 12:47am
1/10 of one percent of people getting mortgages in the US don't speak english, maximum. Now, how many people READ the fucking loan agreement? Probably less than 1/10 of 1%. And whose fault is that? It's their own fucking fault. You sign a contract that you don't read or understand and now you want the sweet milk of mother USA's taxpayer treasure chest to bail you out? Fuck that shit. Those people can suck my fucking dick, and then they can learn to read the fucking contract next time.
Permalink Practical Economist 
April 23rd, 2007 12:49am

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