ForeclosureS.com: Pre-foreclosure Filings Set Record

ForeclosureS.com: Pre-foreclosure Filings Set Record in July
Nationwide News - September 2008

Pre-Foreclosures hit record highs in July 2008 both nationally and in 14 states and the District of Columbia according to new figures from ForeclosureS.com (www.foreclosures.com) California-based foreclosure information specialists.

“So far this year, more than 1.25 million Americans faced the risk of loosing their homes to foreclosure, up 7.3% from June 2008, and up 88.62% from July 2007,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com.
“The nation’s Southwest and Southeast regions have been hardest hit with three and four times the number of pre-foreclosures in July 2008 than in the Northeast and Midwest (Southwest, 86,625; Southeast, 65,458; Northeast, 20,541; Midwest, 19,640),” adds McGee.

California-based ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, foreclosure auction, and/or REO (lender-owned real estate after a foreclosed property reverts back to the lender). Pre-foreclosure filings are the first initial notice and do not all end up foreclosed.

“Looking at pre-foreclosure filings as a percent of households — the best way to judge future foreclosure trends — this year 7.2 out of every 1,000 house holds nationwide faced possible foreclosure,” says McGee. “Again, numbers in the nation’s Southwest and Southeast were up big — at least almost double those in the Northeast and Midwest as overextended homeowners in Nevada, Arizona, Florida, and California led the nation pre-foreclosure problems,” says McGee.

“Short-term, there’s no question that the foreclosure outlook is grim. But, longer term there is promising news. Foreclosures tend to peak well after the housing market has bottomed, which maybe forming as we speak. The National Association of Realtors’ Pending Sales Index on previously owned homes, an indicator of existing home sales, was up 5.3% in June over May, its highest point since October 2007. That’s huge news. So is the U.S. Gross Domestic Product (GDP), which doubled in the second quarter over the first. The numbers aren’t big — 0.9% to 1.9% — but it still signals a growing economy. New home construction also is down big, another positive sign as the supply overhang works to catch up with buyers demand.

“Foreclosures and short sales (selling homes for less than their loan value) make up a huge chunk of today’s sales market and those low sales prices are skewing sales values down,” said McGee. “But thanks to the new housing bill recently passed first time home buyers are coming into the market to grab their $7,500 tax credits, FHA reform is easing their loan process, and there is a ton of affordable housing to chose from. Plus, for the first time in a long time you can buy a near-new home for less than its replacement cost,” adds McGee author of The ForeclosureS.com Guide to Advanced Investing Techniques You Won’t Learn Anywhere Else (Wiley), and The ForeclosureS.com Guide to Investing in Pre-foreclosures Without Selling Your Soul (Wiley).

Let’s look at a few of the July numbers from ForeclosureS.com:

Pre-foreclosures by region based on filings per 1,000 households July 2008 YTD versus July 2007 YTD 2007:

• Southwest, 21.4 pre-foreclosures per 1,000 households YTD vs. 10.5 per 1,000 YTD 2007;
• Southeast, 24.1 per 1,000 vs. 11 per 1,000 YTD 2007;
• Northeast, 8.4 per 1,000 vs. 6.7 per 1,000 YTD 2007;
• Midwest, 11.3 per 1,000 vs. 9.3 per 1,000 YTD 2007.).
• States with the most pre-foreclosure filings per 1,000 households July 2008 YTD:
• Nevada (59.1 per 1,000 up 126.44% from YTD 2007);
• Arizona (54.9 per 1,000, up 403.67% from YTD 2007);
• Florida (48.3 per 1,000 up 176% from YTD 2007);
• California (25.2 per 1,000, up 119.13% from YTD 2007).

14 States with monthly record totals for July pre-foreclosure filings for 2008 include:

• Nevada (7,993);
• New York (5,157);
• North Carolina (4,888);
• Tennessee (3,499);
• Oregon (3,199);
• Missouri (2,561);
• Utah (1,973);
• Pennsylvania (1,520);
• Nebraska (820);
• New Mexico (495);
• Montana (371);
• Hawaii (373);
• District of Columbia (206);
• Louisiana (30).