What One Million Foreclosures Really Means



Mixed signals. This is what everyone interested in what is happening in the real estate market, any market for that matter, has gotten for the last couple of years. No matter how we slice it the economy in America is just not acting on the whims of the optimistic. A story from Reuters today pretty much encapsulates this reality for us all. In 2010 foreclosures in the United States topped one million in a single year for the first time ever. “Silence”

According to the report, banks foreclosed on 69,847 properties in December, which took the yearly number to record breaking 1,050,000, 2009 was the previous record holder with just shy of a million. And, as if anyone in or out of the industry needs more facts, the number of “actions” taken on mortgages reached almost 3 million. Default notices, auctions, repossessions, foreclosure filings, all the bad stuff people hate to hear about, this is THE NEWS.

The Grapes of Wrath

Get your "pickin" clothes on - we may be in for the Grapes of Wrath

The Reuters post goes on to galvanize this shaking reality further with a statement from James J. Saccacio, CEO of RealtyTrac:

“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth-quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings.”

More silence. Now, if you look at the “Foreclosure Heat Map” (below) created by RealtyTrac and maintained on their special community aimed at foreclosures, its easy to pinpoint who has been hit hardest.

ForeclosurePulse heat map

Heat map showing foreclosure hot zones - courtesy ForeclosurePulse

In case the reader is a true die hard optimist, please allow me to dash your hopes for the foreseeable future. Rick Sharga, Senior Vice President of RealtyTrac thinks foreclosures this year will top even this record number once all of them have made it through the pipeline. He suggests that up to 1.2 million more homes will enter the foreclosed property debacle that threatens every American citizen now. You say “every citizen” and “threatens” are strong terms?

Is it not clear yet that no one fulling understands the mountain of debt America is under. Just government’s debt means every man-woman-and-child in the United States owes over $40,000 just to pay off the principal. Now millions of Americans, tens of thousands of investors, and hundreds of banks are stuck with countless more billions.

The national debt clock says it’s time for Americans to pay $14 trillion dollars. This is money you actually owe to China when all is said and done. The debt grows by $4 billion every day. I know, the numbers are staggering, but if you have 3 kids and a wife, just what your government spent could easily pay off your mortgage. How would that be? Basically, you could own a $225,000 home free and clear. Silence…..

High powered real estate broker, or in the street former homeowner, just who reading this expects business to go on in the United States at this rate? If you are not alarmed by this tract of thinking, you should be. Don’t get me wrong, here at RealtyBizNews we are as hopeful and optimistic as the next citizen.  We just seem to be going nowhere fast.

If President Obama and the politicians in Washington have not consider a “New – New Deal, ” we need to get someone up there who is. America, the world, needs action now. And I do not mean talk either. For many experts this recession is actually worse than the Great Depression. Some say the only reason we have not plummeted into even greater calamity is because of the floating of money about, the pretty much synthetic bolstering of economies. But that is fuel for another fire.

A New Deal cartoon of the time

Changing remedies, this is what Obama needs to do.

Just for the sake of this bad news, consider what one million homes being foreclosed upon means. In human terms I mean. Just like your or your neighbor, one million families – a dad, mom, two kids, the dog, a cat – are basically subjugated to eviction sooner or later. The embarrassment, humiliation, stress, and hopelessness of watching every-single-thing-you-own of real value lost. Sometimes a lifetime of hard work disappears – maybe forever. Your fellow Americans humbled, not just one but enough to populate Atlanta, Georgia. And that’s just in one year. I urge you to think about this. And while you are thinking, listen carefully to Henry Fonda in this scene from The Grapes of Wrath. Those “little pieces” of the collective soul of America are hurting – are you gonna be there for your neighbor?