Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Steve Cook, Real Estate Economy Watch
Since 2006, more than 6.5 million families have lost their homes to foreclosure, and today hundreds of thousands more are at risk of joining them. However, the glory days of the foreclosure era are numbered unless a new economic shock darkens the national economic picture and returns the United States to double-digit unemployment.
Three key factors will determine the pace of change:
As always, real change will come to local markets individually based on local conditions.
Signs that the foreclosure era is ending
A steady decline in seriously delinquent mortgages and new foreclosures over the past year is the primary reason that the end of the foreclosure era is beginning. Additionally:
Signs of changes are just beginning to show up in the marketplace. The percentage of distress sales is the same as a year ago—about a third of inventory and nearly half of sales. But the total numbers are down, as both sales and inventory are lower than they were a year ago.
A survey of real estate agents by Inside Mortgage Finance reports distress sales started falling in April. A more recent report by RE/MAX using current June data found that inventories in foreclosure markets that were once awash in foreclosures are down as much as 25 percent to 50 percent from a year ago.
The foreclosure era will end with whimper, not a bang. Foreclosures will be with us for years to come, there will just not be as many. The number of seriously delinquent and foreclosed homes exceeded 4 million at the end of May; that’s about the total number of homes Americans buy each year. How quickly those properties are processed and sold to new owners, rather than how many new properties enter foreclosure, will be the most important factor shaping tomorrow’s foreclosure picture.
Unfortunately, demand for all homes, like demand for foreclosures, is so anemic that the market currently is absorbing foreclosures at a slow rate, and it’s hard to forecast what the inventory might look like in six to 12 months.
Additional complexities to predicting the end of the era
An issue clouding the waters and making near term foreclosure market predictions more difficult is the increasing delays in processing foreclosures following the series of procedural blunders by major lenders last year. With government regulators and litigators looking over their shoulders, lenders are taking forever to dot each “i” and cross each “t.” More than a million foreclosures that should have been processed this year will be pushed into 2012, according to RealtyTrac.
Also, there’s new evidence that lenders delay processing foreclosures to avoid putting the losses on their books as long as they can—and the bigger the debt, the longer lenders wait. A new study by ForeclosureRadar found that it’s taking over a year to process the average foreclosure worth more than $417,000.
Processing delays created the so-called shadow inventory—properties caught in the foreclosure pipeline that have yet to be listed on multiple listing services. The shadow inventory nationally peaked in January 2010 at 2 million units (8.5 months’ supply) but it stands 18 percent lower today than it was in April 2011. The total shadow and visible inventory of foreclosures was 5.7 million units in April 2011, down from 6.2 million units a year ago.
In the end, these processing delays will extend the foreclosure era artificially and with it the pain that it has brought to housing markets though depressed values, negative equity, and oversupply.
Next week, I’ll discuss how the foreclosure era is seeing improvement—and who can take credit for that improvement.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.