Preparing for a Long Hard Economic Journey


In my most recent articles, I think I have made some rational arguments supporting my believe we are in for several years yet of economic challenges.  These challenges, especially when we hit the second leg down will and are becoming very personal to everyone.  Some of the most startling facts that support that statement are realities like now 1 in 4 homeowners are “upside down” in their mortgages.  By that I mean they owe more for their home than its current value! 1 in 4!  Faced with this reality is one thing, but to be unemployed or under-employed, or lacking job security is truly a tough thing to cope with on a day-to-day basis.  Foreclosures are increasing at an alarming rate.

RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, released its February 2010 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 308,524 U.S. properties during the month, a decrease of 2 percent from the previous month but still 6 percent above the level reported in February 2009. The report also shows one in every 418 U.S. housing units received a foreclosure filing in February.

“The 6 percent year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity — albeit at a historically high level that will likely continue for an extended period. “In addition, severe winter weather appears to have temporarily slowed the processing of foreclosure records in some Northeastern and Mid-Atlantic states.”

Foreclosure activity by type
Default notices (Notices of Default and Lis Pendens) were reported on a total of 106,208 U.S. properties during the month, an increase of 3 percent from the previous month but down 3 percent from February 2009. Default notices were down 25 percent from their peak of more than 142,000 in April 2009 but were still more than three times the number they were four years ago in February 2006.

Foreclosure auctions (Notices of Trustee’s Sale and Notices of Sheriff’s Sales) were scheduled for the first time on a total of 123,633 U.S. properties, a decrease of 1 percent from the previous month but still 16 percent higher than the level reported in February 2009. Scheduled auctions were down 14 percent from their peak of more than 144,000 in August 2009 but were also about three times higher than the number reported in February 2006.

Bank repossessions (REOs) were reported on a total of 78,683 U.S. properties during the month, a 10 percent decrease from the previous month but an increase of 6 percent from February 2009. Bank repossessions were down nearly 15 percent from their peak of more than 92,000 in December 2009 but were at nearly twice the level reported in February 2006.

Nevada, Arizona, Florida post top state foreclosure rates
Nevada foreclosure activity decreased nearly 7 percent from the previous month and was down 30 percent from February 2009, but the state’s foreclosure rate continued to rank highest in the nation for the 38th month in a row. One in every 102 Nevada housing units received a foreclosure filing during the month — more than four times the national average.

Arizona and Florida documented nearly identical foreclosure rates, with one in every 163 housing units receiving a foreclosure filing in both states. Despite a nearly 21 percent decrease in foreclosure activity from the previous month, Arizona’s rate was statistically slightly higher than Florida’s rate and ranked second highest among the states.

California’s foreclosure rate ranked fourth highest among the states, with one in every 195 housing units receiving a foreclosure filing during the month, and Michigan’s foreclosure rate ranked fifth highest among the states, with one in every 226 housing units receiving a foreclosure filing.

Other states with foreclosure rates among the nation’s 10 highest were Utah (one in every 275 housing units), Idaho (one in 296), Illinois (one in 305), Georgia (one in 331) and Maryland (one in 407).

Six states account for more than 60 percent of national total
The six states with the most foreclosure activity accounted for 61 percent of the national total in February. California led the way, with 68,562 properties receiving a foreclosure filing during the month — down nearly 5 percent from the previous month and down 15 percent from February 2009.

Foreclosure activity in Florida increased nearly 15 percent from the previous month and was up more than 16 percent from February 2009. The state continued to post the nation’s second highest total, with 54,032 properties received a foreclosure filing during the month.

Increasing foreclosure activity boosted Michigan’s total to third highest among the states. A total of 20,028 Michigan properties received a foreclosure filing during the month — up nearly 14 percent from the previous month and up 59 percent from February 2009.

With 17,312 properties receiving a foreclosure filing, Illinois posted the fourth highest total, followed by Arizona, with 16,718 properties receiving a foreclosure filing, and Texas, with 12,638 properties receiving a foreclosure filing in February.

Other states with totals among the 10 highest in the country were Georgia (12,177), Ohio (11,286), Nevada (11,035), and Maryland (5,732).

Divergent trends in metro areas with top 10 foreclosure rates
Metro areas in the Sun Belt states of Nevada, Florida, California and Arizona continued to dominate the top 10 highest foreclosure rates among metropolitan areas with a population of 200,000 or more, but activity trends in these areas varied considerably.

The Las Vegas metro area documented the highest metro foreclosure rate, with one in every 90 housing units receiving a foreclosure filing during the month, despite a 9 percent decrease in foreclosure activity from the previous month.

Six of the other metro areas in the top 10 — all in California or Arizona — also reported decreasing foreclosure activity from the previous month. The biggest monthly decrease among the top 10 was in the Phoenix metro area, where foreclosure activity dropped nearly 18 percent.

In contrast, the two Florida metro areas in the top 10 both posted substantial monthly increases in foreclosure activity. The Cape Coral-Fort Myers metro area saw a 31 percent increase in foreclosure activity from the previous month, giving it the second highest metro foreclosure rate — one in every 92 housing units receiving a foreclosure filing. An increase of nearly 66 percent in foreclosure activity from the previous month helped boost the foreclosure rate in Port St. Lucie to sixth highest.

The government is trying to encourage bankers and lenders to accept short sales to avoid bankruptcies and foreclosure, but so far the response has been unenthusiastic.  The real tragedy here is that a lot of “baby-boomers” are caught in this web.  They simply won’t have the time to recover because of their age.  Sadly, because they invested in their homes to secure their retirement, 43% of them have less than $10,000 in cash retirement savings.

These facts of reality bring me to the major point of today’s article which is focused to those readers.  Most of you have resigned to simply just work until you die because you rightly perceive you have no choice.  I am going to challenge that thought just a bit and in doing so I first must say that anything I say should not be considered in any way as advice or guidance.  I am just one stubborn old nut-job rambling out loud with you listening to me talk to myself.  I believe we have been conditioned to consumerism and as such we have bought hook, line, and sinker this reality that above all we should protect our credit rating and that we are somehow bad people if we don’t pay every dime back to the banksters with their exorbitant interest rates.  I say BS.  I say take a long hard look at where you are, but only in the context that you need only four things in your retirement.  Food,water,clothing and shelter.  How best to provide those basic requirements may look a lot different if you thought of nothing but that.  For example, if you are 55, upside down in your mortgaged house paying $1200 to 2000 a month on a mortgage, and still have 15 to 20 years left, Why?  In most markets there is no ceiling on mortgages, but there is a ceiling on rentals.  You could be saving $500 to $700 per month and living in better quarters in a rental and you are free to adjust up or down on that expense without penalty.  Just a thought.  I know I will get a ton of mail from “professionals” telling me this is bad advice and as I said THIS IS NOT ADVICE IN ANY SHAPE OR FORM.  It is simply a thought from a rebellious ole …well you know.

To be free of a large debt burden seems much more preferrable to slaving away until the last breath to further enrich thieves who could care less about my welfare.

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Author: redhawk500

International business consultant, author, blogger, and student of life. After 35 years in business, trying to wake the world to a new reality. One of prosperity, abundance, and most importantly equal opportunity. it's time to redistribute wealth and power.

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