Newsletter - July 2020
As cases of COVID-19 spiked to more than 2.5 million in the United States, the Federal Housing Finance Agency (FHFA) last month announced that its ban on foreclosures and evictions, which was set to expire June 30th, would be extended through at least August 31st.
The foreclosure moratorium, implemented in March, seems to be having its intended effect, according to analysis by ATTOM data. Filings in May were at their lowest since the firm started tracking foreclosure data in April of 2005.
But is prolonging the ban a good idea?
A tale of two states
After the robo-signing controversy of 2010, the New Jersey Supreme Court imposed a statewide foreclosure moratorium that lasted for nearly a year. While it was helpful in the short-term, the state is still feeling the negative consequences of the ban.
After a 67% drop in 2011, completed foreclosures in New Jersey increased every year for the next five years. In 2017, foreclosures hit more than 23,000, an increase of 652% from 2011.
By contrast, the state of Ohio (which had a significantly higher foreclosure rate than New Jersey during the housing crisis) considered, but didn’t implement, a foreclosure moratorium in 2010. Completed foreclosures in that state declined just 13% in 2011, but after a brief uptick over the following two years, Ohio saw a downward trend from 2014 to 2019.
In 2019, 57% of New Jersey’s completed foreclosure auctions were tied to properties purchased during the housing bubble (nationwide, that percentage was 39%). And while current home prices have increased 40% since their February 2012 low, they are still 7% below their pre-recession peak in 2007.
Home prices in Ohio, meanwhile, are up 110% from their bottom and are currently 25% higher than their pre-recession peak.
Is that coincidence, or a cautionary tale?
An uncertain future
While we all wait (with masks on) for the COVID crisis to come to an end, the country’s housing market is at a standstill.
“The foreclosures industry in the United States remains on hold right now,” said Ohan Antebian, general manager of online real estate marketplace RealtyTrac.
“When (the moratorium) is lifted, lenders will be able to decide how fast to pursue these cases, which will have a ripple on all the ancillary activity connected to foreclosures. That will likely mean a surge of work for real estate lawyers, process servers, courts and others. But for now, the industry is running in place.”
Forgive us for stating the obvious, but this virus can’t go away soon enough.
In the meantime, let Blue Streak Docs manage your document retrieval and property reports to help you protect your portfolio. If you haven’t worked with us yet, you can try us out and get your 5th order FREE!
Employee Of The Month
Leigh Ann has been with Blue Streak Docs for three years now and in that time, she has become a jack of all trades. She has helped out in every area within the company. When she was hired to be the receptionist, we knew she would go far. Now she is the Chief Administrative Officer's Assistant, which basically means she is running around handling everything to keep us going! From helping on the hiring lines and all of the administration that goes into that, to helping with organizational needs- Leigh Ann is the best at all of it! These last few weeks she jumped in wherever needed which was challenging to say the least, with most of our employees remote. She is always smiling, always eager to help, and always awesome at doing whatever she is needed to do! With her help, not only does she keep things organized, but she does it with a spirit of play that is contagious! Thank you for everything that you do, Leigh Ann. Your award of Employee of the Month is so well deserved! Congratulations.