I wish I could say YES, but I'm afraid the answer is NO. First let's look at recent efforts to curb the foreclosure tidal-wave.

Oh Crap........

As many are aware, foreclosure filings dipped in November by 7%, most likely due to Freddie Mac and Fannie Mae-imposed Moratoriums designed to give lenders and borrowers more time to sort through loan modifications or other means of staving off the foreclosure wolves.

In addition to the moratoriums, the following factors also aided in slowing filings:

  • New Laws - Many states requiring lenders take greater action to avoid foreclosures such as  requiring contact with borrowers earlier in the default process.
  • Loan Modifications - I mentioned recently that I had contracted with a company whose' chief aim was to be the "middle man" between lender and borrower to put in place some type of modifcation to the loan to keep them in the home.

So why will they go back up? Because we are simply treating the symptoms, not the disease. 

According to a recent report on the subject, more than 1/2 of the homeowners who received loan workouts in the first half of 2008 are ALREADY behind again!

The disease is the following: We were living  above our means, typically on credit borrowed from our homes, now our homes are worth enough, home sales are down, and suddenly we are out of work. It is a vicious cycle.

The symptom is foreclosure, whether it be on a home or a car or a ski-boat.

For what it's worth, the states with the highest foreclosure rates in November were (surprise, surprise) Nevada, Florida and Arizona.

What does this mean locally? Tough to know, but what we DO know is this: Most people who took out risky ARM mortgages took them out in 3, 5 or 7 year increments. Well I'm no math wiz, but this summer's foreclosure boom was exactly 3 years from the peak of the market.

One wonders what could happen in 2010 (5 years) and 2012 (7 years).

The good news for St. George / Southern Utah is that, frankly, it is one of the best places to live on the entire planet and numerous magazines and independent groups will corraborate that statement.

A place like Mesquite, Nevada (sorry folks) could see some real trouble as Randy Black shuts down casinos and hundreds of laborers leave for greener pastures.

A question to all: How do we treat the disease?