Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.
"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.
CNN cites nationwide data and specific data for Nevada and Vermont. My own observations (and those of associated professionals) is that central Pennsylvania foreclosures appear to have been generally steady during 2009.
The bad news relates to foreclosures that are still to come. Banks have been slower to initiate foreclosures (both nationally and locally) than in prior years:
[T]he RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly.
Lenders are also slow to dump delinquent properties back on the market for fear of causing a free fall in real estate prices. Foreclosures tend to depress real estate prices in general, not merely the prices of foreclosed properties. If real estate prices spiral downward, existing homeowners will not be able to sell or refinance their homes due to lack of equity. This problem will result in more foreclosures and a worsening real estate downward spiral.
We are witnessing the bursting of a very deep bubble.