Archive for the ‘statistics’ Category
Saturday, July 17th, 2010
A recent report from National Public Radio notes that mortgage foreclosures are likely to reach the one million mark in 2010. To put this figure in context, consider these statistics, pulled from the real estate tracking site RealtyTrac.com:
- In a typical year, the United States sees about 100,000 homes enter foreclosure—a mere tenth of the number expected this year.
- In 2009, considered a big year for foreclosures, 900,000 homes were foreclosed on by banks.
- In the first five months of 2010 alone, 528,000 homes have entered foreclosure—already more than five times the yearly average.
- A whopping 1.7 million U.S. homeowners got some kind of foreclosure-related notice between January and June of this year (some of those houses have already gone into foreclosure). This translates to one in 78 homes in the country.
Understanding the Foreclosure Process
So what causes a bank to foreclose on a home? It can take as long as 15 months for a bank to repossess a home once a borrower is 30 days overdue on payments, according to sources. Here’s an idea of what might happen:
- Missed payments
: If a mortgage payment is thirty days or more late, the homeowner is said to be delinquent on payments. At this point, the lending bank may send a notice of foreclosure. This is kind of the first warning of foreclosure a homeowner can get. At this point, it’s a good idea to contact your lender if you’re having financial difficulties. You may also want to consider consulting with a bankruptcy lawyer about whether Chapter 13 bankruptcy is a viable option to stop your home’s foreclosure.
- Bank notifications: If a borrower continues to miss payments or stops making payments altogether, the bank will likely send notice that foreclosure proceedings have begun. While procedures and laws differ from state to state, homeowners can generally expect various types of notification in the mail and/or via telephone.
- Eviction: Once the bank has processed various paperwork, it can evict the residents of the house and reclaim the property as its own. Because of the unprecedented number of foreclosure cases currently active in the U.S., banks may (but won’t necessarily) take longer than usual to actually evict tenants.
- Foreclosure auction or sale: The bank now owns the home and may choose to sell it at a foreclosure auction or via short sale. Often, as sources note, any proceeds the bank makes from such a sale might be used to cover legal costs for the foreclosure process or the unpaid portion of the mortgage.
Clearly, the news of massive foreclosure action isn’t good for individuals and families who are losing their homes, but it’s also a bad sign for the larger economy. As more and more properties glut the real estate market, prices fall and the chances of a swift recovery in that area diminish.
Posted in Foreclosure, Mortgage, Mortgage Foreclosure, statistics | Comments Off
Sunday, June 13th, 2010
With the news full of foreclosure statistics showing huge increases along with stories of self-righteous Members of Congress asserting their heartfelt concern for "struggling homeowners" little attention is paid to the question of whether a homeowner ought to fight to save his home. My friend and colleague, Charleston bankruptcy lawyer Russ DeMott were recently discussing this issue and I invited him to prepare a guest post about this very topic:
Chapter 13 bankruptcy is a tool that can be used to save your home from foreclosure. But the big question sometimes isn’t “can I save my home,” but “should I save it?"
We all know that there’s been an epidemic of foreclosure resulting from the recent economic downturn. Jobs were lost, values plummeted, and foreclosures have been on the rise.
So it’s natural to wonder, “can I file Chapter 13 bankruptcy to save my home from foreclosure?” However, when you meet with a bankruptcy lawyer to explore your options, you need to explore all your options—bankruptcy and otherwise. And that might be not saving your home.
When you’re having financial problems and seek advice, you should take the opportunity to review your entire financial situation. Can you afford your vehicle payments? Can you “tighten the belt” and cut back on some unnecessary expenses? And most significantly, “should you try to save your home?”
In my Charleston, South Carolina bankruptcy practice, I get calls every week from folks facing foreclosure. The potential bankruptcy client’s question is always a “can we?” Can we stop foreclosure? Can we make the lender listen? Can we catch up on these payments we’ve missed? Can we protect our home? Can Chapter 13 bankruptcy help?
But I always focus on the “should we.” Here are some factors to consider when deciding whether you should use Chapter 13 to keep your home:
- Can you afford the mortgage payments? Do you have large house payments you can’t really afford, perhaps with more than one mortgage? For example, it may be that you can afford payments of $1800 a month, but your current payments are $2800 per month. Absent a mortgage modification, that’s a tough nut to crack every month.
- Is your interest rate scheduled to adjust? It may be that you can afford your payments now but maybe not once your payments adjust.
- Do you have equity in your home? (Equity is the value of the property less any liens (like mortgages, outstanding taxes, assessments, and home owner’s dues). Lately, I’ve been getting calls from clients who not only have no equity, but actually have “negative equity.” For example, your house might be worth $250,000 and you owe $350,000. If that’s the case, you might not want to try to save your home from foreclosure. You’d actually have more equity if you rented!
- Is this where you want to live for the indefinite future? If not, perhaps you should use your financial problems to reevaluate where you want to live. Perhaps renting in another area would lessen your commute or allow your children to enroll in a better school?
These are just a few factors you should consider. You should weight all the pros and cons of saving your home. You can then have your bankruptcy lawyer help you decide whether filing Chapter 13 bankruptcy to save your home really makes sense.
Jonathan's note: in addition to the very relevant points Russ makes, let me add this: if you decide that saving your house in a Chapter 13 does not make sense, a "fresh start" Chapter 7 could be appropriate. Similarly, you can still file a Chapter 13 to reorganize your other debts while you surrender your home. My point – personal bankruptcy is not a "one size fits all" solution – a good bankruptcy lawyer can offer you several options to consider, many of which you may have never considered.
If there is one lament that I hear from my colleagues, it is this – "I wish my clients would call me earlier, when there is time to evaluate bankruptcy and non-bankruptcy options." Sometimes, when there are only days or hours to go before a foreclosure, an emergency Chapter 13 may be your only choice. Even if bankruptcy is something you really do not want to think about, you would be wise to establish a relationship with a bankruptcy lawyer before you end up facing a crisis.
Posted in 2800, Bankruptcy, Chapter 13 issues, Foreclosure, Foreclosure issues, Lawyer, Mortgage, Russ Demott, a, absent, bankruptcy and foreclosure, charleston, client’s, consent to foreclosure, contest foreclosure, deed in lieu of foreclosure, demott, equity, facing, folks, foreclosure , home when, home , home ” in, huge, increases, modification, month , my, oppose foreclosure sale, potential, question, russ, save, saving, showing, statistics, the, you’d, you’re | Comments Off
Thursday, January 14th, 2010
Bankruptcy filings in 2009 reach 1.44 million as consumers and businesses dealt with unemployment, foreclosure and tight credit.
A total 1,435,425 bankruptcy petitions were filed in the 50 states and Washington D.C. That figure increases to 1,446,967 when Puerto Rico, Guam and the Virgin Islands are taken into count.
Nationwide, the bankruptcy rate was up 32% in 2009 compared to 2008 and reached the highest level since the 2005 bankruptcy law change.
Arizona saw the largest increase in bankruptcy filings in the U.S., with 77% more filings in 2009 than 2008. Nevada and Wyoming followed, each with a 59% increase year-over-year. Nevada had the most filings per capita.
Bankruptcies for the year peaked in October, when 133,365 petitions were filed—the highest amount since October, 2005, when consumers rushed to file before the BAPCPA law went into effect. Filings slowed in November and December, but remained above the 2008 monthly totals.
Posted in 2009, filings, statistics, year in bankruptcy | Comments Off
Saturday, December 12th, 2009
This week, many November numbers about money and credit were released, with some surprising findings. Here’s a summary of a few important figures.
November Consumer Bankruptcy Filings Down 18 Percent
The American Bankruptcy Institute (ABI) reports that personal bankruptcy filings decreased 18 percent last month, compared to October’s numbers. Specifically:
- Total filings: 112,152 consumers filed for bankruptcy in November 2009, compared with 135,913 in October.
- Increase from 2008: A year ago, in November 2008, 99,925 consumers filed for bankruptcy. This year’s figure represents a 12 percent jump.
- Chapter 13 filings: Only 29 percent of consumers who filed for bankruptcy did so under Chapter 13 of the U.S. Bankruptcy code last month, a rate unchanged from October.
- Yearly estimate: Sources predict that total bankruptcies in 2009 will total more than 1.4 million.
- Rate of cyber fraud: Of all online sales, 1.2 percent were found to be fraudulent in 2009, the lowest figure recorded in the 11 years CyberSource has been keeping track.
- Online revenue lost: This year, $3.3 billion was lost to cyber fraud, compared to $4.0 billion last year and $3.7 billion in 2007.
- Some areas still problematic: Online sales of electronics still have fraud rates approximately double those of other retailers.
Retail Sales Drop Surprise 0.3 Percent in November
However, this figure is not considered comprehensive, and will be reevaluated after the government releases its sales data on December 11th. Still, the initial figure has some retailers worried that this year’s holiday shopping season will mirror last year’s, when many Americans were holding onto their money after the tumult of the stock market’s crash.
The retail figures, quoted in this msnbc.com article, apparently don’t include online sales, sales from electronics chains or sales from Wal-Mart Stores, Inc., three groups the government’s figures will cover.
Report: Online Fraud Down Overall
In a survey out this month on online scams, the security company CyberSource reports that web fraud has decreased by about 18 percent in the United States in Canada since 2008. Here’s a closer look at the findings:
- Rate of cyber fraud: Of all online sales, 1.2 percent were found to be fraudulent in 2009, the lowest figure recorded in the 11 years CyberSource has been keeping track.
- Online revenue lost: This year, $3.3 billion was lost to cyber fraud, compared to $4.0 billion last year and $3.7 billion in 2007.
- Some areas still problematic: Online sales of electronics still have fraud rates approximately double those of other retailers.
The dip in fraud doesn’t mean you should be any less vigilant when shopping online, though. Be sure to guard your credit card numbers carefully and only shop on secure web sites!
Additional Resources
2009 Online Fraud Report (PDF)
Posted in Bankruptcy, Bankruptcy and the Economy, Fraud, retail, statistics | Comments Off
Wednesday, December 2nd, 2009
The number of Americans filing bankruptcy fell in November, according to the American Bankruptcy Institute, but the number remains above last year's filings.
A total 112,152 consumer bankruptcy petitions were filed in November, down 18% from the 132,749 filed in October. Even though the U.S. Courts were open fewer days in November, the number shows the bankruptcy rate slowing, though moderately.
The average daily filing was 6321 in October, and 5903 in November.
Still, the November statistic remains 12% above the November 2008 bankruptcy figure, when 99,925 consumers filed.
A chart at the Calculated Risk Blog predicts that total filings for the fourth quarter of 2009 will come in slightly below Q3. If December continues the downward trend, it would be the first time that quarterly filings decreased since the new bankruptcy law took effect in the third quarter of 2005.
Posted in Bankruptcy News and Events, consumer bankru, quarterly bankruptcy, statistics | Comments Off
Saturday, November 28th, 2009
According to an article from the Associated Press, fewer Americans were late on their credit card payments in the third quarter of this year than in the second quarter, signaling that consumers may be getting more responsible at managing their debt.
While the decrease isn’t staggering (1.10% of payments compared to 1.17%), the statistic itself is: this is apparently the first time in a decade that late payments have decreased between the second and third quarters.
The Bigger Picture
Here’s a look at how this decrease fits into the larger context of credit card payments and debt in the United States:
- Steady decline: The 6% drop comes after an 11% decline in late payments between the first and second quarters, suggesting that, as a nation, our debt management skills are improving.
- Trend follower: The highest late payment levels occurred in states where the housing bust was biggest (California: 1.33%; Arizona: 1.35%; Florida: 1.47%; and Nevada: 1.98%).
- Outstanding balance: Average amounts due have also declined from earlier quarters and last year: in Q3, the average was $5,612, down from $5,719 in Q2.
- Savings down: The third quarter also saw a slightly lower rate of savings among U.S. consumers, suggesting we’re putting money toward debt rather than in the bank.
So What Does It Mean?
While no definitive explanation can be offered for the drop in late payments, the trend may be affected by a variety of factors, including:
- Unemployment: Both those who have lost their jobs and those who are still working (but are perhaps more aware of the threat of layoffs) tend to cut back on discretionary spending and focus on paying down debt rather than accumulating new “stuff.”
- Tightened credit: Many credit card issuers have pulled way back on their offerings of consumer credit and have gotten stricter about raising interest rates for late and missed payments. This may “scare” consumers into taking their debt more seriously, or into paying down balances to have more wiggle room.
- The holidays: For many of us, a major shopping and/or traveling season is upon us. The dip in late payments could represent a sort of collective preparation for the financial stresses of the season.
- Increased caution: The drop could also point to a more cautious American consumer – one who’s a bit less cavalier about taking on masses of revolving debt.
Additional Resources
Putting Credit Card Debt on Notice (PDF)
How Credit Card Debt Ensnares Consumers (PDF)
Posted in Credit Cards, Credit and Bankruptcy, consumer debt, revolving debt, statistics | Comments Off
Friday, November 13th, 2009
RealtyTrac, a company that follows foreclosure data for the United States, released October numbers on Thursday. It seems foreclosure rates have decreased slightly since last month, but are still significantly higher than they were a year ago.
Foreclosure by the Numbers
Here’s a look at the statistical breakdown of recent foreclosure activity in the country.
- 332,292 property filings in October: This number includes three specific types of action: notices of bank repossession, auction and borrower default. That means one in every 385 American households is in some phase of the foreclosure process.
- Percentage changed: The numbers translate to a three percent drop from September of this year, but a 19 percent increase from October of 2008, suggesting that the moderate improvement is only relative.
- Estimate for the year: Based on information gathered thus far, RealtyTrac is reportedly predicting as many as 3.4 million foreclosures this year, a 48 percent jump from 2008’s total of 2.3 million.
These numbers may seem astoundingly high, and they are – remember that this recession started in the real estate industry, and continues to plague homeowners.
So why are foreclosures still inching up even when the economy is showing signs of recovery? Most likely, sources suggest, the unemployment rate is to blame. Even though consumer spending may be on the rise, millions of Americans are still without jobs – and without serious hope of getting jobs in the near future, which means missed house payments.
Foreclosure Prevention or Just Delays?
The Obama administration has taken some action to try to ease the pain in the housing market. The Home Affordable Mortgage Program, an initiative designed to encourage lenders to offer mortgage loan modifications with cash incentives, apparently helped as many as 20 percent of eligible borrowers last month, up from 16 percent in September.
But those numbers still represent far less than the majority of struggling homeowners – and some other laws may be offering less help than they seem to be.
Nevada, for example, allegedly has a law in place that mandates foreclosure mediation for at-risk borrowers. And, while sources indicate that the state saw a drop in foreclosures this month, it could very well see a jump later on, if and when mediations have been completed and proven unsuccessful.
Additional Resources
Home Affordable Modification Guidelines
Posted in Bankruptcy, Foreclosure, Mortgage, Mortgage Foreclosure, statistics | Comments Off
Monday, November 9th, 2009
Health care costs and filing bankruptcy rates are more closely related than you might think. Check out this chart that shows the skyrocketing costs of health. These costs could be driving many people to file bankruptcy.
Filing bankruptcy and the influence of medical care costs
Skyrocketing health care costs have many people considering filing bankruptcy.
Add this infographic to your site:
Posted in Bankruptcy and the Economy, Filing Bankruptcy, health care, statistics | Comments Off
