MARKET REPORTS NORTHERN CALIFORNIA

Blog by Elaine Giamona

Lincoln, California

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Prepare for a Flood of Foreclosures

Posted at MARKET REPORTS NORTHERN CALIFORNIA by Elaine Giamona

Apr. 15, 2009

Tagged with: 2009, april, flood, foreclosure, homes, march, moratorium

Foreclosure Floodgates About to Open 4.15.09

Prepare for a flood of foreclosures. Major mortgage lenders are about to end foreclosure suspensions and this will have a substantial effect on the market. According to today's Wall Street Journal, J.P. Morgan Chase, Wells Fargo, Fannie Mae, and Freddie Mac have ended their foreclosure suspensions, which began October 31 of 2008, and had delayed foreclosures on over 80,000 homes. Evidence of impending flood is the fact that pre-foreclosure filings during the first three months of 2009 topped 600,000, their highest quarterly level since the foreclosure crisis began.

Lenders say they will still work with borrowers up to the time of foreclosure sale. Fannie Mae and Freddie Mac lifted their foreclosure suspension in March and are moving on foreclosures for investment properties and second homes. Properties eligible for modification under the government's Making Home Affordable program will still be covered by a moratorium, and a foreclosure sale may not occur on a Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for a federal loan modification.

Citigroup according to the Journal has "reverted to our previous business-as-usual moratorium." For Citigroup borrowers who are not a “good candidate” for a loan mod this means foreclosure now looms. The backlog of delayed foreclosures to now be re-activated will undoubtedly distress the housing market's recovery.

Data from Foreclosures.com states that nearly 176,000 homes were foreclosed on in March 2009, up 44 percent from February. Almost 370,000 properties have been repossessed by lenders in 2009, up over 76 percent from the first quarter numbers for 2008.

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