“Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half full” and the pessimist’s “glass half empty”.
Buzz: The number of foreclosed homes surged 116% in one year in California. This is because the restrictions for lenders to compete against seriously delinquent borrowers have ended. The US numbers were even higher, jumping 153%.
Discussion: Is the high-profile spike in foreclosure activity a sign of financial trouble? Or is it just a return to more normal levels of borrower extortion as pandemic-era homeowner protections expire?
sauce: My trusty spreadsheet spied on the house somewhere in the foreclosure process First half of 2022compiled by real estate data tracker ATTOM.
top line
California ranks second in the nation, with 16,340 homes in foreclosure proceedings. Florida topped the list with 17,624 home loans in trouble. California was followed by Illinois with 14,086, Texas with 11,527 and Ohio with 11,028.
glass half full
Let’s look at that level of problem borrowers compared to the total housing unit count.
Using this frequency measure, California ranked 14th with 854 homes nationally, compared to every 881 homes foreclosed statewide. Commonplace? Every 385 homes in Illinois have a troubled tenant, followed by New Jersey with 410, Ohio with 475, Delaware with 497, and South Carolina with 513.
Where are foreclosure filings rarer? South Dakota leads with 1 in 9,068, Vermont with 7,598, North Dakota with 4,466, West Virginia with 3,626, and the District of Columbia with 3,539. continued.
California’s biggest rival Texas was 19th with 1,005 and Florida was 6th with 560.
glass half empty
Given the opportunity, lenders are taking action after about a two-year foreclosure moratorium. California ranked just 36th, with foreclosure activity up 116% compared to his first half of 2021.
The biggest jumps were in Colorado at 595%, followed by Michigan at 497%, Minnesota at 268%, New Jersey at 245% and New York at 227%.
The best performers were Alaska with a 1% decrease, followed by South Dakota with a 2% increase, Kentucky with a 12% increase, North Dakota with a 43% increase and New Mexico with a 48% increase.
Texas rose 187% to No. 6 and Florida rose 124% to No. 28.
Citable
ATTOM analyst Rick Sharga notes that current foreclosure activity is 40% lower than what is considered a normal pattern.
another number
Looking ahead, CoreLogic reported that 1.9% of California mortgages (30 days or more arrears) had some problem in May, half of the 3.8% in May 2021.
A similar pattern was seen in the state’s metropolitan areas. In Los Angeles-Orange County he was 1.9%, down from 4.1% last year. Inland Empire, 4.8% to 2.6%. San Diego, 3.4% to 1.6% San Francisco, 2.8% to 1.3%.
Conclusion
Lenders’ generosity and government support have given financially distressed renters plenty of opportunities to avoid losing their homes as the coronavirus has cooled the economy.
The strong recovery in the economy from the lockdown turmoil has pushed house prices up significantly, suggesting a huge, marketing-shattering wave of foreclosures is unlikely at this point. A surge in foreclosures was expected as delinquent payer protections ended.
But consider the activity in the first half of 2022 compared to two years ago (early in the pandemic era). At this time, we experienced great economic uncertainty and initiated government assistance for troubled borrowers and a moratorium on foreclosure.
Nationally, foreclosure activity has decreased by 1% in two years. California’s foreclosures are down 9% in two years, ranking 28th in the state.
The largest increases were in Montana at 73%, Colorado at 62%, South Dakota at 54%, Minnesota at 50%, and Nevada at 46%.
The biggest drop was in Vermont, down 63%, followed by the District of Columbia, down 51%, Maryland, down 44%, Alaska, down 43%, and New Mexico, down 40%.
Texas fell 5% to No. 26, while Florida rose 12% to No. 11.
if you need help
Just because the foreclosure suspension is over doesn’t mean that troubled borrowers in California can’t get help.
of California Mortgage Relief Program Up to $80,000 in mortgage relief and up to $20,000 in property tax relief to help cover delinquent mortgage payments for households earning up to 50% more than the regional median income. Distributes $1 billion in federal funds.of the application is free And the profits received never have to be repaid.
of relief measures expanded Increase income eligibility for more homeowners and cover overdue property taxes by including homeowners who failed to pay in the first half of 2022.
Jonathan Lansner is a business columnist for the Southern California News Group.he can be reached at [email protected]