Credit, Economy and Financial News from TruckingFactor.com

Foreclosures Dip in January, Helped by Suspensions

The number of Americans on the verge of losing their homes fell in January from December but was still higher than January 2008. Nationwide, more than 274,000 homes received at least one foreclosure-related notice last month, down 10% from December, but still 18% higher on a year-over-year basis, according to RealtyTrac Inc. In addition, RealtyTrac reported that nearly 67,000 properties were repossessed by lenders in January, up from more than 45,000 repossessed properties in January 2008, but down from 79,000 in December. However, foreclosure notices might have been higher had not government-controlled mortgage finance companies Fannie Mae and Freddie Mac suspended foreclosure sales during the winter holidays. In addition, Florida Gov. Charlie Crist cut a deal in which lenders in that state agreed to a 45-day halt to new foreclosure petitions.
 
Some analysts note that unless a government program is developed to restructure the thousands of bad loans that led to the housing crisis, then suspending foreclosures is merely prolonging the problem. The Obama administration has said it plans to spend $50 billion to combat foreclosures, but has provided few details. An announcement of the administration's housing plans is expected in the coming weeks.
 
A separate report by the National Association of Realtors underscores the impact that foreclosures are having on home prices. Prices of existing U.S. single-family homes dropped 12.4% in the 4Q from the same period a year earlier. It was the lowest price level since 2003. The NAR said distressed sales, which include foreclosures, accounted for 45% of 4Q transactions, which dragged down the national median price of existing single-family homes to $180,100.

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Date Last Updated: 02/20/2009