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What's ahead for foreclosures?

FILE - A Jan. 10, 2009 file photo

FILE - A Jan. 10, 2009 file photo shows a bank repo and foreclosure for sale signs outside a foreclosed home in Houston. Foreclosure sales plunged 25 percent in the July-September quarter versus the April-June period and tumbled 31 percent from the third quarter last year, foreclosure listing firm RealtyTrac Inc. said Thursday, Dec. 2, 2010. (AP Photo/David J. Phillip/file) Credit: AP Photo/DAVID J. PHILLIP

In 2010, 1 million homes were foreclosed on by the banks. (Many more received a foreclosure filing.) The number of foreclosures would have been even higher except for the foreclosure moratoriums imposed by the banks near the end of the year. While everyone in the real estate industry is hopeful that 2011 is going to be the big turnaround year, it doesn't look good for foreclosures. Here are five things you should know about foreclosures in the year ahead:

1. Foreclosure lawsuits are slowing the total number of foreclosures. Daren Blomquist, a spokesman for RealtyTrac, says that foreclosure lawsuits slowed the number of foreclosures dramatically. "We hit a 30-month low with the foreclosure numbers in December, mostly due to court cases challenging lenders on whether they have the right to foreclose," Blomquist said. Watch for the number of foreclosure lawsuits to balloon this year, while judges begin to grant class-action status to cases associated with the mega-banks.

2. The number of foreclosures will rise in 2011. Although foreclosures slowed at the end of 2010, those homeowners still aren't paying on their mortgages. Lenders will begin to pick up the pace of foreclosure filings as some cases are resolved (even as new ones are filed). These properties still have to go through the foreclosure process, which means 2011 could be a record-high year for foreclosures, says RealtyTrac Senior Vice President Rick Sharga.

3. Foreclosures might not drop to more normal levels until 2014 -- or later. Blomquist said he thinks that, in baseball terms, the U.S. housing market is in about the 7th inning, or past the middle but with quite a bit left to run. He's not alone. National housing economists agree that the next few years will be tough for the housing industry, with potentially another 4 million to 12 million foreclosures that haven't yet gone through the pipeline.

4. Unemployment is still tied directly to foreclosures. Losing your job means less cash in the household to pay bills, including the mortgage. Lenders are trying to keep homeowners from living rent-free (by not making any mortgage payments) and are jumping on delinquent borrowers more quickly. But until the sky-high unemployment rate declines, it's tough to see how the number of foreclosures will fall. Last year, one in 45 U.S. housing units received a foreclosure filing -- defined as a default notice, scheduled auction or bank repossession.

5. Foreclosures are everywhere, destroying communities. While a handful of states account for the majority of foreclosures, there are plenty to go around. The states with the highest number of foreclosures include Nevada, Arizona, Florida, California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado. It's interesting to note that Utah, which enjoys an unemployment rate of 7.2 percent compared with a national rate of 9.4 percent, is fifth on the list for foreclosures. The biggest problem with foreclosures is that lenders are abandoning properties in some communities, increasing blight and lowering much-needed property tax revenue.

The big news in 2010 is that the number of completed foreclosures rose significantly, Blomquist said. As the loan modification programs wind down (the Obama administration says most of those who qualify have already gone through the system and the rest are, it seems, out of luck), additional foreclosures will be completed.

In other words, 2011 doesn't look like it's going to provide a real boost to the housing industry except, perhaps, for foreclosure listing agents.

Ilyce Glink's latest book is "Buy, Close, Move In!" Distributed by Tribune Media Services

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