Foreclosures way down, but does that equal good news?
Foreclosure filings decreased again in November, down almost 8% from the previous month. That marks the fourth month in a row that was the case.
Of course, there is still plenty of bad news because the foreclosure rate is up an enormous 18% from a year ago this time.
Right now, the RealtyTrac report reveals that one in every 417 households got a foreclosure notice last month alone.
In a news release, RealtyTrac's chief executive officer says, "Loan modifications and other foreclosure prevention efforts, along with the recently extended and expanded home buyer tax credit, are keeping a lid on the most visible symptoms of the nation's ailing housing market--foreclosures and home value depreciation."
But James Saccacio is also smart enough to know that there are still lots of dark storm clouds on the horizon -- heck, some are almost directly overhead. He goes on to correctly say that, " ... a full recovery will only come when unemployment recedes to normal, healthy levels and when availability of credit reaches a more rational balance between the extremes of the past few years."
While it is true that the pace of job cuts has apparently slackened in recent months, the economy will have to actually grow hundreds of thousands of new jobs each month, for many, many months, before unemployment, as Saccacio puts it, "recedes to normal, healthy levels." So far, we see no convincing evidence this is about to happen.
And, as for banks opening up their vaults, currently still stuffed with toxic assets (bum mortgage loans), to start extending credit to more and more people, that doesn't seem to be in the cards just yet, either.
My guess is, a key reason the foreclosure rate has dropped is because lenders have stepped up, to a somewhat limited degree, temporary mortgage modifications, making it a bit easier for some folks to keep their roofs over their heads. The problem is, the banks have been kicking and screaming all the way to Washington to head off government pressure to make most of these temporary modifications permanent, which means, in a few, short months, we could actually see the foreclosure rate start to climb again
Charles Feldman is a journalist,media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."