Have you seen any foreclosure signs?

Although the wagging heads are predicting that IBM's report yesterday would jump start a rally on Wall Street today, yesterday's drop of 306 points on the DowJones suggests that many aren't feeling so optimistic.

Last night at board meeting in town, one of my townfolks confided that two houses out of the 10 on their little cul de sac sprouted Foreclosure signs just in the past two weeks. That's a scarey 20% -- though a laughably small sampling.

But we are an "out of the way" pocket and pretty conservative financially (not a lot of real estate speculators in our tiny town), so such in your face evidence was startling.

Is anyone else seeing evidence in their neighborhoods?
UPDATE below.

As predicted by moi, today saw the rally that wasn't. From WSJ's noon-time article Rally Wilts as Worry Remains :

The stock market lost hold of its early gains despite rosy announcements from two blue-chip companies and speeches by Bush administration officials proposing fiscal stimulus for the sagging U.S. economy.

Major indexes were mixed Friday afternoon. The Dow Jones Industrial Average posted triple-digit gains early in the session but was recently down 05.25 points, or 0.4%, at 12108.97.

The stockmarket boys can't even sustained a lift.

And back on topic...about the new home construction and the rate of foreclosures... a random google search found this about Illinois from Chicago Tribune reporter Greg Burn's Jan 13th articleHousing gridlock in Will County: Buyers are scared, sellers stuck:

One of the nation's fastest-growing counties in recent years, Will County now has the highest foreclosure rate in Illinois and its housing market has come to a standstill. Yet where California or Florida can blame out-of-sight prices, and Ohio or Michigan their shrinking economies, Will County remains affordable and growing even as its residential for-sale signs multiply.

Wonder what effect Bush's printing boatloads of greenbacks will really have.

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Zero, zip, nada, with a very few notices of default in the local rag. Talked to a VP of a large development company and was told they are selling in only two price ranges: at or below 200,00; and at or above 850,000.

Local banker's friend was close to a reset they couldn't afford, so he just called and gave them a choice: freeze the reset for a year or foreclose. The lender froze because the borrower - like 80% of the market - had not missed a payment. (Rational, given the average $50k it costs to foreclose).

At a time when accurate information is vital, we are bombarded with "factoids" in every form of media. Back at the (computer) farm competing interests exchange literally billions of shares of various stocks daily, each "side" issuing forth "expert" opinions, almost none of which can be trusted.

Umbrellas are advised in advance of the heavy yellow rain.

Heavy slickers and waders also advised -- the coming storm may deliver relentless torrents of sidewise yellow water and a backlash of flooding.

:/

As a former realtor who helped people facing foreclosure I have two suggestions. I am writing them here because as well as being bloggers, many of us are active in our own communities and it's just a bit of knowledge to share.

A person threatened with foreclosure can sometimes be negotiated a market value sales price that the mortgage lender will be prepared to accept (writing the unpaid amount on the mortgage.) This is very advantageous for the seller who does not lose his or her credit rating, and for the lender who does not have to administer the foreclosure sale with all that involves. I have negotiated such deals in the past.

It is great the lender agreed to freeze the payments for a year. It used to be that under Chapter 11 bankruptcy (if I am remembering which kind of bankruptcy correctly)this would happen automatically. The court would assign a repayment plan and the lender could not foreclose. I don't know how things stand with the new bankrupcy law. Of course declaring bankrupcy means liquidating other assets and is not a good thing, and is damaging to person's credit score.

carol

I know there was a rush of folks who declared bankruptcy before the laws changed, some of whom may not have declared at the time if the law hadn't been "adjusted," because the closure of "loopholes" ("advantages" for the consumer) almost all worked in favor of the lending institution.

In retrospect, nickle-and-diming the consumers to fatten up the lenders while doing nothing to rein-in the lenders themselves from bad practices -- and allowing them to operate in a less-than-transparent mode -- led us to this current financial crisis with the sub-prime fiasco etc.

...there's an article somewhere that talks about the law that was effectively gutted and freed up financial institutions to do stupid things again; I believe it was a blog post, but unsure if it was on ePluribus Media or over on the Big Orange. I seem to recall, however, that it was in or around the Clinton era that the law changed.

That may be one of Clinton's worst legacies, if true.

...do you recall reading anything like that or know any of the background...?

Vancouver Sun --

"The federal government response has been anemic," said Mayor John DeStefano of New Haven, Connecticut, where foreclosures rose 80 per cent in 2007.

"Mayors are talking to each other about this," DeStefano said. "No one else is going to help these homeowners."

Thomas Cochran, executive director of the mayors' group, said foreclosures could become a defining issue for urban leaders, like the AIDS epidemic in the 1980s, which cities were forced to tackle early when they saw insufficient federal response.