That's right, boys-n-girls, foreclosures surged 53% in June. Surged? Compared to what? Last year at this time. And in that same story is the good news that home foreclosures declined 3 percent from May, according to RealtyTrac Inc.
But, we can't be having that for a headline.... can we.
June's figures mean that two tenths of one percent of all homeowners in this nation will lose their home. Two tenths of one percent. It sux to be them, but this is not a crisis.
We've dealt with this chicken little nonsense before, and we know that half of those facing foreclosure will be able to negotiate or refinance to fend off foreclosure. That brings the actual figure down to one tenth of one percent. Banks want paying customer's, not repossessed white elephants they have to dump.
Still, the AP can't help but wallow in the misery of the "magnitude of the foreclosure crisis" while in the same paragraph highlighting the ultimate cause of this personal misery: poor financial planning by the homeowners themselves.
Analysts say the mortgage industry's effort to assist troubled borrowers is being overwhelmed by the magnitude of the foreclosure crisis, and Treasury Secretary Henry Paulson said earlier this week that many foreclosures are "not preventable," citing borrowers who "took out mortgages they can't possibly afford and they will lose their homes."
In other words, those 'glorified renters' who dove into the deep end of the loan shark, sub-prime loan pool with no extra income or financial savings to weather any storms. The very people who helped create the over-inflated real estate bubble that the hysterical hyperbolists (like the AP) now demagogue with headline bias because that bubble has popped!.
So where's the buyer's market? In the comparatively slow home sales & (no more sub-prime) falling prices.
Pending home sales fall 4.7% in May.
NEW YORK (CNNMoney.com) -- The number of homes under sales contracts fell more than expected in May after a surprising spike the month before, a real estate trade group said Tuesday.
Gee. Why is that? Mike Larson, real estate analyst at Weiss Research, said, "...the May decline was caused by falling consumer confidence, rising unemployment, tight credit conditions and high energy and food costs straining household budgets."
Yup. Cheap money & disposable income that once caused consumer frenzy is shrinking, but the real kicker is the tight credit condition that is merely common sense following the sub-prime debacle. Common sense that should have been de rigueur for any lender or borrower with more financial acumen than a four y.o. in a candy shop.
But let's not forget all the 99.98% home owners in this nation who are not facing foreclosure. Plus, don't forget the long time home owners who aren't even considering selling their home. Like most investments, real estate values go up & down. Sit tight. It'll go back up. In the meantime, contact your local county assessor to request an adjustment - which will reflect your now lower property value, which, in turn, determines your property tax.
Sit tight and prosper.
As for the well prepared, well informed, and financially able home shoppers - It's (still) a buyer's market.
Shop wisely, and prosper. Chicken little is road kill.
