HUD Articles

Foreclosures-A-Poppin’: The February U.S. Foreclosure Market Report published by ATTOM found 25,833 properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — during February, an 11% increase from January and a 129% hemorrhage from one year earlier.

Rick Sharga, executive vice president at RealtyTrac, cautioned that the dramatic increase from one year ago is a reflection of the acknowledgment that today’s housing market is operating under different government-imposed rules.

“This isn't an indication of economic turmoil, or of weakness in the housing market,” Sharga said. “It's simply the gradual return to normal levels of foreclosure activity after two years of artificially low numbers due to government and industry efforts to protect financially-impacted homeowners from defaulting."

Indeed, the absence of government protection is reflected in the double- and triple-digit year-over-year statistics. During February, lenders repossessed 2,634 properties through completed foreclosures, up 70% from last year, while 16,545 properties were the subject of foreclosure starts, up 176% from 12 months before.

The states with the greatest numbers of foreclosures starts in February included California (1,868), Florida (1,527) and Texas (1,488), while Chicago led the major metro areas with 1,075 foreclosure starts, followed by New York City (793) and Los Angeles (530).

Lender Pessimism: The newly-published first quarter 2022 Mortgage Lender Sentiment Survey from Fannie Mae's 

FNMA -0.8%

 (Get Free Alerts for FNMA) found 75% of mortgage lenders believing their profit margins will decrease in the next three months -- in the previous quarter, that percentage was 65% -- while 17% felt profits will remain the same and 9% predicted profits will increase.

The key causes for a potential profit decline, according to the lender, was competition from other lenders, market trend changes and consumer demand. Most lenders were also uncomfortable about the state of the economy, with 59% voicing concern that the economy is on the wrong track, compared to 29% in the first quarter of 2021.

"For the sixth consecutive quarter, mortgage lenders expressed bearishness about near-term profit margin expectations amid headwinds from declining refinance activity, slower purchase mortgage demand growth, and narrowing spreads," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "For consumers, rising interest rates, lack of supply, and strong home price appreciation have reduced refinance activity and further constrained home purchase affordability, which, of course, is dampening lenders' expectations of future business activity.

“Numerous uncertainties, including heightened inflation and the Fed's monetary policy reaction, which must now also account for the inflationary impact of Russia's war on Ukraine, suggest increased market volatility, but the general underlying, upward rate trend aligns with lenders' expectations," Duncan added.

https://www.benzinga.com/news/22/03/26083849/housing-beat-why-are-foreclosure-filings-up-129-from-last-year