Reply #10: Foreclosures dip - but hold the applause

[ozymandius]

NEW YORK (CNNMoney.com) -- Foreclosure filings dropped 7% from October to November, according a report released Thursday. But don't break out the bubbly. The tide of foreclosures may be ebbing now, but the flood isn't over yet according to analysts.

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November's decline in foreclosure filings is deceiving, according to Rick Sharga, RealtyTrac's vice president of marketing, because much of it is attributable to temporary foreclosure prevention efforts.

"The reduction is because Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) both announced moratoriums on foreclosures, while major lenders also put the brakes on foreclosure proceedings," said Sharga. "State moratoriums are also delaying the onset of foreclosures. But all that will only delay, not avoid them."

Sharga expects to see another good report in December, but a significant spike in foreclosure filings come January.

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The economic climate is rapidly deteriorating and job losses are soaring - factors that are sure to exacerbate the housing crisis. And various forward-looking indicators show more trouble ahead.

For instance, the number of homeowners who fell behind on their mortgages hit a record 6.99% in the third quarter, up from 5.59% a year ago, according to the Mortgage Bankers Association.

http://money.cnn.com/2008/12/11/real_estate/foreclosures_sink/?postversion=2008121104