To quote Bette Davis in “All About Eve”, fasten your seat belts, duplex buyers and sellers. We’re in for a bumpy ride.
RealtyTrac, the nation’s leading source for foreclosure data reported that while foreclosure activity was down nationally for the third straight quarter, there were signs it was beginning to ramp back up.
Remember, starting last October when the robo-signing controversy cropped up, banks have dramatically slowed their foreclosure filings while being investigated for their paperwork.
Realty Trac President Rick Sacchio stated, “Third quarter foreclosure activity increased marginally from the previous quarter, breaking a trend of three consecutive quarterly decreases that started in the fourth quarter of 2010. This marginall increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months trying to clear the chimney of sloppily filed foreclosures.”
Notices of default were filed on 195,878 U.S. properties in the third quarter; a jump of 14 percent from the previous quarter.
Averaging 1 foreclosure in every 878 houses, Minnesota fared better than the national average of 1 foreclosure for every 605 houses.
In Anoka County, however, the average was 1 out of every 410 houses. Hennepin County saw 1 out of every 520 property owners receive notice of a pending sheriff’s sale.
While my own data collection methods are nowhere near as sophisticated as Realty Trac’s, I too have seen an increase in the number of duplex owners receiving notices of default in Hennepin and Ramsey Counties in the last few weeks. Today I recognized four in the southwestern metro area alone.
What’s frightening is many of these duplex owners facing foreclosure or short sale did not overpay for their duplexes during the boom.
In fact, the trend seems to be people who purchased their duplexes in the early 1990’s, refinanced during the boom, and took equity out of the property for other purposes.
I don’t know if RealtyTrac includes refis in their projections of the estimated 4 million property owners who are behind on their mortgages nationwide or not.
But if they don’t, we’re definitely going to need better shock absorbers.