The housing crisis began in 2007, escalated in 2008, and became a disaster in 2009. It’s going to begin again.
It will be a great time for investors.
“We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.
“Last year was an anomaly, and not in a good way,” he said.
The robo-signing scandal slowed foreclosures in 2011. Now the state governments have fined the banks, and the foreclosures can re-start.
In January, foreclosure starts jumped 28%, year to year.
Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo’s rose 68 percent and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.
Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.
In 2008 and 2009, subprime mortgages were the disaster zones. This time, it will be conventional mortgages. The next wave of foreclosures will hit average families.
It will hit average neighborhoods.
Real estate company Zillow Inc says more than one in four American homeowners were “under water” or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.
“We’re seeing more people coming through who have good loans with reasonable interest rates,” said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago Inc, which provides foreclosure counseling. “But in many households only one person works now instead of two, or they had their hours cut.”
As many as 9.5 million homes are still at risk of default.