It Could Be A Tough Week

We are going to have to brace for a week of some serious foreclosures.

Here is the data from the guys at First American CoreLogic.

FACL Negative Equity

To summarize:

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. As of June 2009, there were an additional 2.5 million mortgaged properties that were approaching negative equity. 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).

The distribution of negative equity is heavily skewed to a small number of states as three states account for roughly half of all mortgage borrowers in a negative equity position. 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.

Mortgage Facts & Figures - Select States

California has $2.4 trillion in mortgages debt. 42.0% of the properties have negative equity.

You think Wells Fargo with all of its California exposure via Wachovia via Golden West is properly capitalized?

tradersutra.blogspot.com/2009/07/toxic-loans-and-wells-fargo.html

tradersutra.blogspot.com/2009/04/smoke-mirrors-at-wells-fargo_09.html

Florida has $923 billion in mortgage debt. 49.4% of the properties have negative equity.

Illinois has $447 billion in mortgage debt. 29.4% of the properties have negative equity.

Arizona has $298 billion in mortgage debt. 51.0% of the properties have negative equity.

Nevada has $149 billion in mortgage debt. 65.6% of the properties have negative equity.

Nationwide there is $10.1 trillion in mortgage debt. 32.2% of the properties have negative equity.37.6% of the properties have "near-negative" equity.

This last note about nationwide is more depressing. Almost 38% of all homes backed by mortgages are in effective "I Cant Sell Mode". All you need is a smaller drop in Case Shiller and that figure flies over 50% easy.

I have written about foreclosures:

tradersutra.blogspot.com/2009/08/negative-equity-in-homes-spells-more.html

tradersutra.blogspot.com/2009/08/we-will-have-no-2nd-wave-of-home.html

tradersutra.blogspot.com/2009/07/why-home-prices-have-more-downward.html

tradersutra.blogspot.com/2009/07/shadow-home-market-holds-key-to-housing.html

tradersutra.blogspot.com/2009/05/structural-problem-in-mortgage-land.html

This week alone is going to have a huge wave of foreclosures.



The reasons we will see no relief in foreclosure land:

-Millions upon millions of people are under water in terms of home equity.
-Employment is going up not down. Wages are down. Job Market sucks.
-Cant get credit to refinance.
-Loan Mods will only keep the wolves away for 6 months at best.
-Bankruptcy actually is a better way for consumers to "Do It Over" all again.
-The social attitude towards Bankruptcy has changed, once that happens......

Anyone who has the nerve to say we will see a V-Shaped Recovery should be shot point blank.