During the last two days, the Boston Globe has run seven stories — count em, SEVEN stories! — on foreclosures in the main and regional versions of the paper. The lead story on Saturday, June 18, 2005 — Foreclosure filings jump in Mass. as home values soar — was the fourth Boston Globe front page story on real estate in the past six weeks.
A second Associated Press story appeared on Saturday, State foreclosure filings jump 28 percent in early part of year, followed by regional versions in Sunday’s paper (see list of links below). According to the Globe:
Secretary of State William Galvin listed numerous factors in
the sharp increase in foreclosures, including high housing prices,
lenders’ willingness to give loans without a major downpayment and
people’s desires to own something priced beyond their means.
you tie all these factors together … you have a recipe for disaster,"
said Galvin, whose office oversees the registries of deeds in most of
the state’s 14 counties.
Headlines in regional editions of the Boston Sunday Globe on June 19, 2005 mirrored Galvin’s comment:
In hot market, some feel chill of foreclosure
Loss of dream house is a nightmare for Peabody couple
The real estate boom’s flip side: foreclosures
Filings skyrocket as overextended homeowners fall prey to personal debt, predatory lenders
Ease of borrowing money, uncertain economy leave some homeowners struggling to keep up
Number of people losing their homes is on the rise
Many of the statistics used in the lead story and regional editions were from ForeclosuresMass. The group will be hosting a number of educational events for foreclosure investors in coming weeks, including a FREE one-hour tele-seminar on July 13, followed by a one-day foreclosure seminar on July 23, and a two-day Foreclosure Summit in 2006.
During the last real estate down turn, The Real Estate Cafe’s
founder, Bill Wendel, helped eight government agencies auction
foreclosed properties to low and moderate income households in 50 major
cities across 25 states between 1990 and 1995. Foreclosures during
that period increased after the housing market changed. In contrast, the Globes headlines repeatedly noted that the foreclosure rate is soaring now at the same time that the housing market is still overheated.
When the market really cools, things will get worse, potentially
much worse. A recent New York Times article called the magnitude of
interest-only and adjustable rate mortgages "The Trillion-Dollar Bet" because "$1 trillion of the nation’s mortgage
debt – or about 12 percent of it – [will] switch to adjustable payments in 2007." Will foreclosures spike then?
An upcoming article in the July / August issue of The Atlantic Monthly, entitled "Countdown to a Meltdown,
speculates that the situation could become so bad that "repossession
riots" will occur in some areas. Do you think that fictitious forecast
is irresponsible fear mongering, or foreshadowing a falling market that
will make current home buyers look foolish; or worse, candidates for
foreclosure in the future?