James J. Saccacio
In its Year-End 2009 Metropolitan Foreclosure Market Report, RealtyTrac shows that cities in four Sun Belt states accounted for all top 20 foreclosure rates in 2009 among metro areas with a population of 200,000 or more.
Even more worrisome--foreclosure activity shows signs of spreading into previously insulated areas as unemployment became more of a driving factor.
California accounted for nine of the top 20 metro foreclosure rates, followed by Florida with eight, Nevada with two and Arizona with one.
The highest-ranked metro area outside of those four states was in Boise City-Nampa, Idaho, which ranked No. 24 with 4.66 percent of its housing units receiving at least one foreclosure notice in 2009.
"While it was expected that cities from states with the highest levels of foreclosure activity would top the charts, there is evidence that we're entering a new wave of foreclosures, driven more by unemployment and economic hardship than what we've seen over the past few years," says James J. Saccacio, chief executive officer of RealtyTrac.
"Areas like Provo, Utah, Fayetteville, Ark., Portland, Ore., and Rockford, Ill., all posted foreclosure rates above the U.S. average in 2009.
"And markets like Honolulu, Minneapolis and Seattle saw foreclosure activity increase at more than twice the national pace over the past 12 months -- although all three of those markets still had 2009 foreclosure rates that were at or below the U.S. average."
Top 10 Metro Foreclosure Rates
Las Vegas posted the nation's highest metro foreclosure rate for the year, with more than 12 percent of its housing units receiving a foreclosure notice in 2009 -- more than five times the national average. Las Vegas reported a quarter-over-quarter decline in foreclosure activity in the fourth quarter -- as did all the other metro areas with foreclosure rates ranking among the top 10 for 2009.
With 11.87 percent of its housing units receiving a foreclosure notice in 2009, Cape Coral-Fort Myers, Fla., documented the second highest metro foreclosure rate. Other Florida cities in the top 10 were Orlando-Kissimmee at No. 7 (8.17 percent), Port St. Lucie at No. 9 (7.58 percent), and Miami-Fort Lauderdale-Pompano Beach at No. 10 (7.16 percent).
Merced, Calif., registered the nation's third highest metro foreclosure rate, with more than 10 percent of its housing units receiving a foreclosure notice in 2009. Other California cities in the top 10 were Riverside-San Bernardino-Ontario at No. 4 (8.80 percent), Stockton at No. 5 (8.62 percent), and Modesto at No. 6 (8.53 percent).
The Phoenix-Mesa-Scottsdale metro area in Arizona documented the nation's eighth highest metro foreclosure rate in 2009, with more than 8 percent of its housing units receiving a foreclosure notice during the year.
2009 U.S. Metro Foreclosure Market Data
*Actual increase may not be as high due to data collection changes or improvements
**Collection of records classified as NOD began in August 2009 because of change in state law
† Collection of some records previously classified as NOD in this MSA was discontinued starting in January 2009
†† Collection of some records previously classified as NOD in this MSA was discontinued starting in September 2008
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happyashell | 01/28/10 11:17 AM | Reply
INDEPENDENT VOTER RESPONSE TO THE POLITICAL PARTIES SPEACHES
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Solving The Unemployment And Foreclosure Crisis
Normal capital markets did not cure the Great Depression of the 1930s and they cannot solve this economic crisis either, because collateral values have decreased so much and so many homes have underwater mortgages.
Economic recovery cannot be provided by the capitalist entity because it is still healing and will experience a relapse if interest rates continue to rise.
The government's job programs of the 1930s helped decrease the misery but they did not end the Great Depression.
For an economic stimulus to work it must increase the purchaing power of the people not the banks. People create economic demand not banks.
I want to discuss with you, a different approach to economic recovery.
Enclosed you will find an alternative plan to the government's foreclosure and economic recovery program. I believe that if you improve the purchasing power of a large portion of the population this will help the minority of the population by improving the entire economy. Helping the 10% unemployed is a noble effort but does not create sufficient aggregate demand to re-employ the unemployed or the under employed. The second part of the plan addresses part of problems that caused the bubble economy we have had in the last decade and the reoccurring cycles of recession and inflation since the 1960s
To solve the unemployment and foreclosure crisis and stabilize mortgage interest rates, we must start by doing two things.
First, we need to create a mortgage with terms that fit the current economic conditions.
The new mortgage I am proposing would improve the economy and the financial condition of Fannie Mae, Freddie Mac (FNM & FRE) and the banks. I call it the 30 yr. 2010 STABILITY MORTGAGE. It would have a starting interest rate of 3% and increase 1/4% a year. (3% is currently more than 300% above the inflation/deflation rate of 0%. Mortgage rates have been historically 100% above the inflation rate. (3% inflation, 6% interest rate) The current mortgage interest rate is over 500% above the inflation rate-0% inflation, 5% interest rate). The interest rate on the new mortgage would cap out at 5%. The borrower would have to qualify at the 5% interest rate. Mortgages that are underwater would have their unpaid balance reduced by an amount equal to 20 to 30% of their monthly payment amount each month for 10yrs or until the mortgage equals the then current possible sale price of the home. (Reducing the mortgage monthly by a small amount would be less of a loss to the mortgage holder than by reducing the mortgage by foreclosure or a short sale.) The main objective is to keep the homeowner in their home and make the home mortgage payments affordable as the home owner pays off the mortgage.
If FNM & FRE and the Federal Reserve (Fed) said they would buy a mortgage with a 3% starting rate, the banks would offer it to the public. Temporarily, if necessary the US Treasury would buy FNM & FRE bonds. (US Treasury would receive the money back when the Fed bought the Mortgage Backed Securities (MBSs) from FNM & FRE. The banks would earn the fees for arranging and servicing the home mortgage. FNM & FRE would have less loses from foreclosures. They would be collecting interest on a larger mortgage than if they foreclosed or short sold the home. The MBSs the Fed currently holds would go up in value and should be sold to investors to reduce the Fed's balance sheet. The Fed would buy the new MBSs and sell them to investors, after home prices stabilized and the mortgage interest rate, on the new mortgage, had risen above the 10yr T-Bill rate.
Enacting the ZERO INFLATION TAXATION POLICY is the second thing we should do. This policy will help prevent another economic crisis similar to the one that we are currently experiencing. It would also create a stabile market for thirty year fixed rate mortgages.
Conclusion: Foreclosures should decrease if the mortgage reduction plan is put into effect and the mortgage starting interest rate is reduced to 3%. The homeowner's purchasing power will increase by 50% of their monthly interest payment, if their current mortgage interest rate is 6% or more the first year and then slowly decrease the following seven years. With increased consumer purchasing power, aggregate demand would increase, there by employment would increase. The banks would become stronger because their customers would become financially stronger and the collateral for small business loans would be stabilized.
If this economic recovery plan makes sense to you, call your friends, news, and TV station, Congress or the President and express your support. Unless the private enterprise entity speaks up, the capitalistic entity will continue to gamble in the money markets, buy government debt and profit from the Fed’s discounted interest rate; Thereby denying the enterprise entity the means of exchange it needs to have a broad based economic recovery. If this economic recovery will make your life better; Please send the e-mail or make the call now!
If you would like to discuss the Zero Inflation Taxation Policy or any other matter, I am available. Go to my web site for more information. www.economysflaw.wordpress.com/ Read Alternative Economic Stimulus Plan.
Leonard C. Tekaat is a retired economic analyst, economic scholar, businessman, financier, investor, author and former candidate for California Congress. He has over forty years in the financial world.
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Posted in these Groups: Business & Finance, News, Politics
Topics: unemployment, foreclosure, economic crisis
posted by happyashell on Wednesday, January 27, 2010 at 09:46 PM
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posted by happyashell on Jan 28, 2010 at 07:05 AM
I sent an article very similar to this one to Professor Mark Evans an economics professor at CSUB asking him to comment. This is a copy of the e-mail I received from him.From: "Mark Evans" View contact detailsTo: "Leonard Tekaat" Hi, Leonard. I agree that current policies haven't been very effective thus far in addressing the foreclosure mess and that the macro economy remains vulnerable to a two-dipper because of it. I think we probably need something along the lines you suggest that cuts both interest rates and the principle upon which the monthly payments are based. Several months ag, I found a couple columns online by Alan Blinder that described the highly successful program that was implemented during the depression due to upside-down mortgages and defaults. The agency that was created to run this program rana profit and was "put to rest" sometime in the 1950's when the last of the contracts expired. I'm not sure without looking at it more closely, but I think your suggestion may work in a similar fashion. We also need some regulatory changes to reduce the risk of bubbles and we needed the stimulus package, as imperfect as it was. Mark Evans
This is my reply to him.On Thu, 1/28/10, Leonard Tekaat wrote:> From: Leonard Tekaat > Subject: Re: From Leonard Tekaat> To: "Mark Evans" > Date: Thursday, January 28, 2010, 6:16 AM> I> agree regulation on the mortgage origination sector and> banks is needed. On the Stimulus I am not so sure. The banks> are investing in that debt instead of in the economy. > > By enacting the Zero Inflation Taxation Policy this> would decrease the excessive creation of money after> inflation is occurring in an economy. At my web site> you will find an article on this policy and a comment> section. The Alternative Economic Stimulus Plan is> also worth reading. Some of the tax policies of the 1990s> helped create the economic crisis of 2008. It just took time> to snow ball into a bubble. I am referring to the> $500,000.00 homeowner's capital gains exclusion. Please> read the article and you will understand what I am talking> about. Waiting for your reply.
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