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| http://www.nakedcapitalism.com/2016/11/wolf-richter-what-the-hecks-going-on-with-foreclosures-why-this-spike.html |
"The total number of homes with foreclosure filings jumped 27% in October from September, when they’d been at the lowest level since 2006. It was the biggest jump in monthly foreclosure filings since August 2007.
...the inventory of homes with foreclosure filings is beginning to rise even on a year-over year basis. And in some states it soared year-over-year:
Colorado +64%
Georgia +22%
Pennsylvania +20%
Arizona +17%
Virginia +15%
Massachusetts +11%
New York +10%
...When home prices rise for years, foreclosure filings become rare because defaulting homeowners can usually sell the home for more than they owe and pay off the mortgage. The problem arises when home prices fail to rise locally, and it balloons when home prices fall.
Just like what happened in Guilford County in 2008 and 2009
before the Fed stepped in and 'saved' us from ourselves
We’ve seen that last time around. After bouncing along super low levels during Housing Bubble 1 through 2005, foreclosure filings skyrocketed during the housing crash starting in 2006. At first it was just an uptick that no one paid attention to. By 2008, it helped take down the financial system.
Consider all the job cuts hitting the Piedmont Triad over the last 12 months
How long will the tobacco workers make it without livable wages?
How about all the Miller workers up in Eden?
Think they got jobs paying anywhere near as much?
...the spike in October stands out as much as those in the early phases of the housing bust in 2006 and 2007.
...“The loans used in this housing recovery that appear to be most susceptible to foreclosure are those such as FHA and VA with low down payments. Our data shows FHA and VA loans combined represent 49% of all active foreclosure inventory for loans originated in the seven years ending in 2015.”
...Recall that low-down-payment mortgages played a big role in the last housing collapse.
With little skin in the game,
it's pretty easy to walk away from an unafordable mortgage payment
...So take this as an early red flag, the kind you might have seen in 2006 when no one paid attention to red flags in the housing market.
Some of the same characters that played leading roles during the last housing bubble and bust are back in their full glory."
Wolf Richter
