Here’s the latest news from the foreclosure front. The number of homes in default continues to worsen.
Here is the skinny.
From AP by Alan Zibel entitled: US foreclosure filings surge 48 percent in May
“Soaring foreclosures are continuing to raise questions about the mortgage industry’s claims that lenders are making a dent in the housing crisis.
Foreclosure filings last month were up nearly 50 percent compared with a year earlier. Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year and up 7 percent from April, foreclosure listing service RealtyTrac Inc. said Friday.
According to the RealtyTrac report, one in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record.
Foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates.
Metropolitan areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif. and the Cape Coral-Fort Myers area in Florida.
Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices, the company said.
In Nevada, one in every 118 households received a foreclosure-related notice last month, more than four times the national rate. In California, one in every 183 households faced foreclosure.
Rick Sharga, RealtyTrac’s vice president of marketing, said foreclosures are unlikely to peak until sometime this fall, as more loans made to borrowers with poor credit records reset at higher levels. “I don’t think we’ve seen the high point,” he said.
About 50 to 60 percent of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance.
As foreclosed properties pile up, they add to the inventory of homes on the market and drag down home prices. The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.
Nationwide, one out of every four sales between January and March was a distressed sale, and that figure jumps to more than 50 percent in the hardest-hit areas like Las Vegas, Detroit and distant suburbs of Los Angeles, according to Moody’s Economy.com.”
Unfortunately, the trend in foreclosures is one that will continue to tick higher as interest rates rise.
Freddie Mac, reported yesterday that 30-year fixed-rate mortgages averaged 6.32 percent this week, the highest level in nearly eight months and up sharply from 6.09 percent last week.
That’s because home mortgages rates are largely tied to the the yield on 10 yr. Treasury notes. As those yields rise, mortgage rates rise with them.
Here’s a look at the yield on 10 yr notes. It’s the road to higher home mortgage rates.
And if there is one thing that the housing market can’t stand right now it is higher rates.