Won't You Be Worried With Foreclosure Filings Setting Record Highs?

On Bloomberg News: U.S. Foreclosure Filings Set Third Record-High in Five Months

• U.S. Foreclosure Filings Set Third Record-High in Five Months
  
  By Dan Levy
  
  Aug. 13 (Bloomberg) -- Foreclosure filings in the U.S. climbed to a record for the third time in five months in July as falling home prices and the recession left more homeowners unable to keep up payments or refinance.
  
  A total of 360,149 properties received a default or auction notice or were seized last month, according to data seller RealtyTrac Inc. One in 355 households got a filing, the highest monthly rate in RealtyTrac records dating to January 2005, the Irvine, California-based company said in a statement.
  
  “We’re in a deep hole,” Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., said in an interview. “There is a whole new wave of foreclosures tied to the cyclical dynamics of the economy.”
  
  Foreclosures increased as the U.S. recorded another 247,000 job losses in July and home prices fell, leaving an increasing number of mortgage holders owing more than their properties were worth. The median price of an existing single-family house dropped 15.6 percent to $174,100 in the second quarter, the most in records dating to 1979, the National Association of Realtors said yesterday. Almost one-quarter of U.S. mortgage holders are underwater, property data firm Zillow.com said Aug. 11.
  
  “There are a slew of factors showing fundamental weakness on the demand side: tighter underwriting, job loss, investors who’ve been badly burned,” said Stuart Gabriel, director of the UCLA Ziman Center for Real Estate in Los Angeles. “We have not seen the bottom of the housing market.” .............

On NYTimes: Colo. Foreclosure Filings Hit Record High in 2Q

On Forbes: Missouri home foreclosure filings inch up in July

On BizJournals: Dallas-FortWorth area foreclosure filings up 32%

On KGW.com Oregon cracks top 10 list of states with highest foreclosure filings

On NJ.com New Jersey foreclosures rise 21 percent during first half of year

On the CityWire: Arksansas: Fort Smith metro sees increase in foreclosure filings

On Chicago Tribune: Foreclosure actions delayed in spring move into system in summer

And here's from Calculated Risk blog, American CoreLogic: More than 15.2 Million Mortgage Holders Underwater

• More than 15.2 million U.S. mortgages or 32.2 percent of all mortgaged properties were in negative equity position as of June 30, 2009 according to newly released data from First American CoreLogic. June’s negative equity share was slightly lower than the 32.5 percent as of the end of March 2009 and it reflects the recent flattening of monthly home price changes. As of June 2009, there were an additional 2.5 million mortgaged properties that were approaching negative equity and negative equity and near negative equity mortgages combined account for nearly 38 percent of all residential properties with a mortgage nationwide.
  
  The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. In California, the aggregate value of homes that are in negative equity was $969 billion, followed by Florida ($432 billion), New Jersey ($146 billion), Illinois ($146 billion) and Arizona ($140 billion). Los Angeles had over $310 billion in aggregate property value in a negative equity position, followed by New York ($183 billion), Miami ($152 billion), Washington DC ($149 billion) and Chicago ($134 billion).
  
  ... Nevada (66 percent) had the highest percentage with nearly two‐thirds of mortgage borrowers in a negative equity position. In Arizona (51 percent) and Florida (49 percent), half of all mortgage borrowers were in a negative equity position. Michigan (48 percent) and California (42 percent) round out the top five states.

Talking about underwater mortgages, Jesse had this posting US Housing in a Deep Dive Says Buba where the following Bloomberg article was highlighted "‘Underwater’ Mortgages to Hit 48%, Deutsche Bank Says".

And do consider Jesse's latest posting: The Next Wave of the Financial Crisis Is Coming (And Why)

• ...If the economy worsens, especially if unemployment remains elevated or if the commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value. Banks will incur further losses on their troubled assets. The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.
• This crisis was years in the making, and it won‟t be resolved overnight. But we are now ten months into TARP, and troubled assets remain a substantial danger to the financial system.