Connecticut foreclosure filings surged 22 percent in July compared with the previous month, according to a report to be released today, as homeowners continue to struggle with mortgage payments.Connecticut reflects the foreclosure issue is spreading from the hot spots (CA, AZ, NV, and FL) to other states.
The number of properties with filings in July increased to 2,319, compared with 1,895 in June, according to RealtyTrac, the foreclosure tracking firm, which is releasing its monthly report of national and state-by-state foreclosure trends. The most recent month's filings were 48 percent higher than the levels reported in July 2009.
Today's report suggests that the state's foreclosure troubles have yet to peak. In Connecticut, 1 in every 622 households had a foreclosure filing in July — worse than 1 in 762 households in June.
Nationally, properties with filings totaled 325,229, a 4 percent increase compared with June, but down 10 percent from the same month a year ago. First-time default notices fell in July for the sixth straight month on a year-over-year basis. But that was offset by near-record bank repossessions, which rose year-over-year for the eighth straight month.
The increase in repossessions suggests that lenders may be stepping up their efforts to push foreclosures through to their conclusion. Some banks and servicers have been allowing homeowners delinquent on their mortgage payments to remain in their homes longer.
While the number of first time defaults is declining year over year, there’s a bulge in existing foreclosures soon to be bank REOs. That will push prices lower later this year and bring another segment of society into the upside down club. That should bring another wave of fresh foreclosures as there is little loyalty to making mortgage payments once the equity is gone.
And absolutely, banks are starting to deal with the issue with more vigor for a couple of reasons. First, banks were playing kick the can with real estate loan issues the first half of 2010. Add in the wave of people who've failed to modify a mortgage solution and are now in the foreclosure pipeline. Both add up to swelling non performing loans on bank balance sheets that need to be dealt with by those banks.
A negative indicator is the extremely low 30 year mortgage rates well below 5% are doing little if anything to stimulate real estate buying. That speaks volumes to the appetite for real estate demand.
I’ve said it a lot lately, “Real Estate Lower by End of 2010.”
Hope all is well.
J.D. Rosendahl, Rosey