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Home Foreclosure Tsunami Is Going to Hit

Written by Gary North on April 6, 2012

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.

Continue Reading on www.reuters.com

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16 thoughts on “Home Foreclosure Tsunami Is Going to Hit

  1. sean murry says:

    I am glad i dont have a home today.

  2. Jonathan says:

    I talked with a mortgage lender who works for Chase Bank. He said the inventory of houses they were holding here in the state of Colorado alone was unbelievable. What foreclosures we see on the market for sale are just a fraction of the actual inventory, since if the banks put their entire inventory on the market it would crash overnight.

  3. Bill McCroskey says:

    Lenders have been holding on to repo inventories as they do not want to take a hit on their capital requirements. If they have a $300,000 non performing home loan they can carry it on their books at that amount for as long as they wish, not marked to market or take the huge loss selling it for half or more of the mortage balance due. More cooked books from 'banksters' of Wall Street. They are using the governmental 'kick the can down the road' accounting method.

  4. MontanaMEL says:

    Bill has it right…
    Look at "how" these homes are being marketed…very, very, few are going at a "true BK" auction on the Courthouse steps!
    Most are going as "short sales" with long term periods to gather the bids in… these then go to large "packager's"….100 homes at a pop or so… look at what's going on in Las Vegas right now…Canadian funds of all things… just a variation on RIT's… They have been "quoted" as saying that they intend to "rent them out" for 5 yr or so, and then resell into what they forcast to be a more "normal/inflated" market…aiming to DOUBLE THEIR INVESTMENT MONEY!!.. AND, the banks are enabling this/these actions — RATHER than the proper/correct method of letting such properties go to a final auction, open to bidding from the public!.. (Con't below)..

  5. MontanaMEL says:


    Banks have a right to control their own processes…but, if they are going to Repo someone's house, that person is suspose to be able to "bid" to get it back come the courthouse step day… Soon, very soon, we are going to see "banks" start to form such "rental entities" within their own corp structures…and, they will simply "transfer" such properties at "book value" over to this different corp "holding co"…in exchange for some "paper" of promise – which washes' this "loss" off their books with an offseting asset/paper…then they will just play rental agent for a few/lot of years…pocketing the monthly income without any reduction in this principle amount tied to the original loan amount… Once more…the banksters' will fudge the books their way!

  6. The Power Hour with Joyce Riley.

  7. ccfonten says:

    I'm glad my husband and I worked hard and paid our mortgage off years ago!

  8. USPatriot says:

    What worries me is that t hey will try to foreclose on my home which is paid off completely! They did that to a guy in FL and he had paid cash for his. He took the bank to court for the costs to defend against the bogus foreclosure. The bank wouldn't pay so the home owner FORECLOSED ON THE BANK! The sheriff showed up and told them they were shut down out of business. The aggreived home owner got his check in two hours. Hahahahaha! I just love justice.


  10. That is right. The banks are holding the inventory as hostage when they could be renting them out for a reasonable amount. But they are jerks. ALL of them. Hope they fail.

  11. How could the bank foreclose on something that had no loan attached? You are not telling the whole story. Banks can't foreclose on something they have no interest in.

  12. Homeowner says:

    Tea party idiots in office, should be hung in effigy. And why are expensive and expansive homes still being built?

  13. Andy, it’s true. It actually happened the way as described. The bank would not listen to the home owner and foreclosed on a home they had nothing to do with. The rest is as described above.

  14. Homeowner. This problem started way before the Tea Party went to Washington. This is one one the reasons the Tea Party became in existant. You can blame Dodd and Barney Frank for most of this problem when they said anyone and everyone can afford a new home. You’ll have the backing of Fanny and Freddy.

  15. Old Fart American says:

    We don't want them to fail! Think about it. We all would suffer from that!! We just don't like it when American people suffer and loose their homes and watch the CEO's get bonuses. But there is NOTHING wrong with profit, if they are making a profit. Large inventory and low sales usually doesn't make a profit.

  16. Problem is many of them are not making a profit and they still want bonuses.