It's sometimes amusing to see how hard the media tries to spin bad news into good news. For instance, this article from ABC today.
(Reuters) - U.S. mortgage foreclosure filings dropped for a second straight month in February, and notched the smallest annual increase in four years as housing-rescue efforts contained activity, a report released on Thursday showed.
It sounds like good news, huh? There's just one problem: the foreclosures report that was released today concerned the whole first quarter, including March numbers.
Since when did the news media start preferring outdated data over recent data?
I guess when the recent data said things like this.
RealtyTrac® ... today released its U.S. Foreclosure Market Report™ for Q1 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 932,234 properties in the first quarter, a 7 percent increase from the previous quarter and a 16 percent increase from the first quarter of 2009. One in every 138 U.S. housing units received a foreclosure filing during the quarter.
Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
California had the most foreclosures with 216,000, accounting for 23% of the nation's total. Florida was second with 153,500.
Nevada had the highest foreclosure rate for the 13th straight quarter at 1 in every 33 homes. Arizona was second with 1 in every 49 homes.
The long-predicted and feared wave for foreclosures is now beginning to hit.
There is one report that Bank of America intends to increase its foreclosures by 600% over last year.
All of this is happening just as the federal Home Buyers Tax Credit is about to expire in two weeks, and the Federal Reserve just stopped purchasing mortgage-backed securities.
Interestingly, the Congressional Oversight Panel in charge of monitoring bailout efforts released their own report today about the Making Home Affordable program (HAMP).
In its April report, the body said that Home Affordable Modification Program was not working. "Treasury’s response continues to lag well behind the pace of the crisis." The report added "As of February 2010, only 168,708 homeowners have received final, five-year loan modifications – a small fraction of the 6 million borrowers who are presently 60+ days delinquent on their loans."
The premise of the Administration’s $75 billion program to slow defaults and foreclosures may be flawed at its base... Data from the Office of the Comptroller of the Currency and the Office of Thrift Supervision show that over half of the revised home loans are in default within a year. Payments that are 30 days late on altered loans given over the twelve months rose to 57% as of the late March report from the two agencies.
While the federal and state programs have managed to forestall hundreds of thousands of mortgages, it has managed to actually prevent very few. This is part of the reason why we are seeing the sudden surge of foreclosures as the long-delayed process finally winds down.
The amount of bank-owned houses is enormous. The credit rating agency Standard & Poor’s estimates that if you include houses in the normal foreclosure process with the banks "shadow inventory", it would take nearly three years to clear at the current sales rate.
As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m...
With the launch of HAMP, servicers shifted strategy from liquidation to modification. The amount of loans that progressed from seriously delinquent to REO fell to 28% in Spring 2009 from 58% in June 2008. In that time, seriously delinquent loans that cured went from 32% to 58%, according to the report. But analysts found that this shift was only temporary.
The HAMP program has numerous flaws. For instance, when it comes to the jobless it is worse than nothing.
Recent changes to the federal foreclosure-prevention program were billed as helping the unemployed, but in the long run, they actually make it harder for people without jobs to keep their homes.
When the new rules go into effect, unemployment benefits will no longer count as income for determining whether a person qualifies for a long-term reduction in their mortgage payments.
The Obama Administration originally said that HAMP would prevent 3 to 4 million foreclosures, but the new Congressional report says it will probably only reach 1 million, and that doesn't include home owners that can't keep up with modified payments.
Proof that the HAMP program has been a near total failure can be seen in this recent announcement from the Obama Administration.
Got any ideas for how to remake the U.S. mortgage market? The Obama administration wants to hear them.
The administration on Wednesday published a list of seven questions about how to remake the institutions that provide money for home loans. The idea is to get comments from banking and securities industry groups, academic experts and consumer organizations.
The mortgage market froze up in the summer of 2007. The foreclosure crisis began even before that.
And now, after all this time, the government is finally looking for ideas? How pathetic is that?