Nash Law Firm, PLLC
By: Stephen J. Nash
Like everyone my eyes and ears pick-up whenever I read or hear some pundit assure us that the economy is on the way up or that the real estate market has finally turned the corner. Unfortunately, none of the optimistic predictions and observations that have been made in the last three years ever proved to be true. As a result, I'm in the camp that says I'm not going to believe in any positive prediction until it actually happens.
In my simple way of looking at things, I don't see how the economy or the housing market can turn around until the foreclosures are stopped and people have paying jobs. Foreclosures drive the values down and if people do not have jobs or income to support their debt the foreclosures will continue to rise. If people don't have jobs, they won't be able to borrow money to buy a house, which will also drive the values down.
I'm sure many "experts" would be able to give me a number of reasons why my view is wrong; however, these are many of the same experts who assured us that there was no housing bubble.
The foreclosure and default statistics for 2010 show that the foreclosure problem has not faded away; however, within the overall numbers, actual repossessions have surged. RealtyTrac projects that in 2010 over 3 million properties will receive a foreclosure filing and more than 1 million properties will be repossessed by lenders.
The greatest difference between the national numbers and the Minnesota numbers is that the foreclosure activity in Minnesota for the first half of 2010 was almost exclusively in sheriff sales and repossessions. Why so many repossessions and so few pre-foreclosure notices? Hard to say. The increase in sheriff sales and repossessions could be explained by all of the voluntary postponements of sheriff's sales. Bank of America in particular routinely delays the foreclosure process. The shocking number is the low number of foreclosure notices that went out during this period of time. Are the lenders delaying starting the foreclosures? Some certainly are. Does it reflect the fact that many homeowners are attempting to obtain a loan modification? If so, you can expect the foreclosure notices to dramatically spike upward when the loan modification attempts fail and they almost always do.