A record 1.53 million properties were in the foreclosure process -- default notices, auction sale notices and bank repossessions -- during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released Thursday by RealtyTrac.As I said earlier, we're now seeing the second tsunami of foreclosures, mostly caused by rising unemployment. The problem is simple, this second wave is self-perpetuating. People lose their jobs, they lose their homes to foreclosure, they can no longer buy the products and services provided by their neighbors and home prices around the foreclosed home fall, neighbors get laid off and the cycle begins again.
There were a total of 1.91 million filings resulting in 1 out of every 84 U.S. properties receiving at least filing in the first half of the year. Banks repossessed 386,800 properties.
"What this means is, despite the intensity of the efforts on the part of government and lenders we don't have a handle on foreclosures yet," said Rick Sharga, a spokesman for RealtyTrac.
And, in a bad sign for a housing recovery, there was no recorded improvement in June, the last month of the cycle. More than 336,000 homes reported foreclosure filings, the fourth straight 300,000-plus month. Filings were up 33% over last June and nearly 5% compared with May.
"Foreclosure activity continues to increase to record levels," said James J. Saccacio, chief executive officer of RealtyTrac in a prepared statement. "Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes' are now worth represent a potentially significant future risk."
It's going to continue to get worse. Obama's program to stop this cycle was pretty much doomed to failure when Congress refused to pass cramdown legislation to allow bankruptcy judges to modify mortgage payments. The measure was killed by the ConservaDems.
So now we're facing the music. Foreclosures are growing rapidly, and as long as that happens we're in trouble. On top of the unemployment tsunami, we're looking at millions of adjustable rate mortgages adjusting upwards over the next 18 months.That'll only make it worse. We've got a long way to go, folks. Despite Jim Cramer's idiotic braying, we are nowhere near the housing market bottom. The first six months of 2009 are only the beginning.