Foreclosured Homes vs. Foreclosure Filings

The media has been having a field day over the last few years trying to spin the housing crisis. And for the longest time the media didn't even want to admit there was a problem. Just think back about the numbers and headlines we saw coming out of the National Association of Realtors (NAR) month after month . . . telling us it was the bottom, things were turning, GREAT Time to Buy, buyers' market and whatever else they could dream up after a few tokes on the crack pipe.

If you think that is too harsh, remember . . . David Lereah (Liar) was fired from NAR as their Chief Economist and Chief Spokesman (Liar) because his spin was wearing thin. Now David Liar is out publicly "admitting" he lied and spun the truth. His successor Lawrence Yun is even worse.

The Spin Factor - In any event, I am getting a bit off track - as usual. I wanted to explain a common spin in the numbers that can vary from month to month and even within one month, from area to area.

Foreclosed Homes - This means the lender has filed a foreclosure action in court AND received final judgment. Basically, it is final, and the mortgagor has lost the home to the lender. It is official and in the deed is now in the name of the lender.

Foreclosure Filings - This means the lender has filed a foreclosure action in court. That's it. Nothing more. It could take weeks, months and in some cases a year or more before there is a final judgment.

OK, so when you hear about Foreclosures being Up or Down, you need to look at both numbers. What the media will do, is spin whichever number is better for whatever message they want to get across. Rarely will you see solid reporting where they talk about both numbers and explain what each means.

Great News - Foreclosures Down - I just finished reading an article with an upbeat headline about how foreclosures had fallen, and this was such a grrrreeat sign. OK, that makes sense, right?

Bad News - Foreclosure Filings UP - Whoa . . . because in that same area, foreclosure "filings" had more than doubled. Here's what this means. During the past six months, the Obama Administration has pressured banks to back off from foreclosures. Obama and his clowns monkeyed with the free markets, and the numbers of foreclosed homes dropped.

But . . . and this is a huge but . . . now that the clowns and monkeys have no idea what to do next, the Banksters are running to court to "file" foreclosure actions. And that is why the number of new foreclosed homes fell, but the number of foreclosure filings has spiked higher.

Once these foreclosure filings are completed, we will see the same spike in foreclosed homes.

The Real Numbers - You want to watch foreclosure filings, and when these begin to fall, then you know we could be approaching a leveling off, that may lead to a bottom. If you are looking at foreclosed homes, you want to look at prices, days on market and absorption rates. I know that is a lot to think about, but that is the only way to get a real picture for what is going on.

Delinquency Notices - Finally, you also need to factor in delinquency notices. I hate to confuse you, but even before a foreclosure filing, you have delinquency notices. So if you want to truly gauge what is going on, you need to factor in delinquencies. If these spike, you can expect a spike in foreclosure filings that will convert to foreclosed homes . . . but this conversion process could take 6-18 months.

Summary - We ARE, in fact, seeing a huge spike in delinquencies as unemployment grows. This is an ugly number that tells me we are not going to see a "U" or a "V" recovery, but instead we are headed for another leg down. Beware of the next ObamaRamaLama: (1) another extension or version in the $8,000 home buyer credit, or (2) the Administration to start buying homes with or without Chinese drywall and bulldozing them, or (3) a tremendous Bankster deal that will reward the Banksters for mortgage relief or forgiveness . . . that they will burden taxpayers with.

But one thing I can guarantee you . . . liars can figure but figures don't lie. Delinquencies are rising. Unemployment is rising. One plus one will always equal two. And in this case it means more delinquencies, more foreclosure filings, more foreclosed homes . . . and falling home prices, which in turn will lead to more homes underwater.

Looking for a home or condo in Florida? - I'd welcome the opportunity to assist you with a purchase of a home or condo. For additional information please call me 772-260-5448 or visit our website www.FloridaHomes.PRO

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