HOA Law Blog
2008 was a banner year and for all of the wrong reasons. Foreclosure activity was way up, and the experts project that we will not see a decline in foreclosures in the near future.
RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, released its 2008 U.S. Foreclosure Market Report™, which shows a total of 3,157,806 foreclosure filings – default notices, auction sale notices and bank repossessions – were reported on 2,330,483 U.S. properties during the year, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006. The report also shows that 1.84 percent of all U.S. housing units (one in 54) received at least one foreclosure filing during the year, up from 1.03 percent in 2007.
Foreclosure filings were reported on 303,410 U.S. properties in December, up 17 percent from the previous month and up nearly 41 percent from December 2007. Despite the spike in December, foreclosure activity for the fourth quarter was down nearly 4 percent from the previous quarter but still up nearly 40 percent from the fourth quarter of 2007.
Nevada is ranked #1 in foreclosure filings per household and California is now ranked #4 on a per household rate.
James J. Saccacio, chief executive officer of RealtyTrac, had the following to say regarding December foreclosure activity: “State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December. The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners. Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami. And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners.”
RealtyTrac believes the foreclosure numbers will go higher due to the 7% of loans that are now delinquent (per the Mortgage Bankers Association as of November) and due to the fact that more than half of the homeowners who received a loan modification in the first half of 2008 are already delinquent on their loans (per the U.S. Office of Thrift Supervision). In addition to the above reasons, more than 500,000 jobs have been lost over November and December.
Click here for more of the article and charts showing U.S. Foreclosure Market Data by state and to see how the top 100 Metropolitan Statistical Areas (MSAs) are fairing with foreclosures (for 2008).
This information means that California Community Associations should anticipate another year of delinquent owners abandoning their property with associations and the other members having to absorb this uncollectible bad debt.