(FinalCall.com) –

“There are several indications that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months.”

While the November 2008 U.S. Foreclosure Market Report shows foreclosure filings–default notices, auction sale notices and bank repossessions–were down seven percent for the month, filings were still up 28 percent from the same time last year. The report also showed one in every 488 U.S. housing units received a foreclosure filing in November.


“Foreclosure activity in November hit the lowest level we’ve seen since June thanks in part to recently enacted laws that have extended the foreclosure process in some states, along with more aggressive loan modification programs and self-imposed holiday foreclosure moratoriums introduced by some lenders,” said James J. Saccacio, chief executive officer of RealtyTrac, which produces the report.

“There are several indications, however, that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months,” he said.

Job losses drive mortgage delinquencies

According to the Department of Labor, the number of unemployed persons (10.3 million) and the unemployment rate (6.7 percent) continued to increase in November.

The unemployment rates for men (6.5 percent) and women (5.5 percent) continued to rise in November. However the unemployment rates for teenagers (20.4 percent), Whites (6.1 percent), Blacks (11.2 percent), and Hispanics (8.6 percent) showed little change over the month.

“Until recently, it was job and population losses that were the problems in states like Michigan and Ohio, whereas the problems in California and Florida were a combination of too many houses, speculation and weak underwriting.Economic fundamentals are now deteriorating in California and Florida,” said one expert.

“Over the past year, Florida led the nation in job losses at 156,200, with California losing 101,300, as compared with Michigan job losses at 71,200 and Ohio at 17,300,” said Jay Brinkmann, Mortgage Banker’s Association’s chief economist and senior vice president for research and economics.

He added, “Absent a recession, the 2009 numbers would likely have fallen by several hundred thousand but the effects of job losses and general economic deterioration make the 2009 outlook worse, particularly if mortgage problems become more widespread.”

California posted the most foreclosures in any state in November following two consecutive monthly decreases. Despite a 9 percent decrease in foreclosure activity from the previous month, Florida continued to post the nation’s second highest number of properties with Michigan having the nation’s third highest state total.

Nevada, Arizona, Ohio, Georgia, Illinois, Texas and Virginia also reported foreclosure totals that were among the nation’s 10 highest.

Helping struggling homeowners

“Homeowners need help but they don’t know there are congressionally-funded nonprofits that can help them, that will advocate for them to get the best deal from their lender, and will hold their hand throughout the modification process,” said Marcia Griffin, founder and president of HomeFree-USA.

“Plus we can give them options that many may not consider. We have to get the word out that real assistance is here, and it is free. That’s why we’ve launched our campaign to help 1,000 homeowners in Metro D.C. by New Year’s Eve.”

The organization conducts extensive consultation with the homeowner to modify mortgage payments and terms to affordable levels, directly negotiates with the lender to accept the modified mortgage and has helped thousands of homeowners since 1995.

The issue of loan modification is a great concern for homeowners because studies show “more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again,” according to the U.S. Office of Thrift Supervision. “Many of these delinquencies could turn into foreclosures next year,” said Mr. Saccacio.

HomeFree, based in the Washington, D.C. area, serves homeowners nationwide.

Related links:

America’s economic downturn (FCN, 04-11-2008)

The Collapse of the Housing Pyramid Scheme (FCN, 01-09-2008)

Two fixes for a broken financial system (11-25-2007)