Saturday, July 04, 2009

LA Times: 'Another wave of foreclosures'

by Bill McBride on 7/04/2009 09:08:00 AM

From Don Lee at the LA Times: Another wave of foreclosures is poised to strike

Just as the nation's housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.
...
Just how big the foreclosure wave will be is unclear. But loan defaults are up sharply. ... rising foreclosures will depress home values, pushing more homeowners underwater. Mark Zandi of Moody's Economy.com estimates that 15.4 million homeowners -- or about 1 in 5 of those with first mortgages -- owe more on their homes than they are worth.
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"Absolutely," Chase Bank spokesman Tom Kelly said when asked about an impending surge in foreclosures. ... Bank of America spokesman Dan Frahm said the company was projecting a "slow increase" in the number of monthly foreclosures, potentially reaching 30% above previous normal levels.
...
But anecdotal reports indicate that foreclosure sales have started to climb again in the second quarter. And the pipeline is clearly getting fuller.

... just recently, said [Jerry Abbott, a broker and co-owner of Grupe Real Estate in Stockton], there's been a surge of requests for so-called broker price opinions, or appraisals that lenders often ask brokers to provide just before they put a foreclosed property on the market.

"I think it's going to be a very big wave," he said. "Just like what we saw through 2008."
Hoocoodanode? And just wait for the Option ARM recast wave ...