It could be we're just beginning to see some towels thrown in. .
guardian.co.uk
US home repossessions rocket to record levels
Las Vegas is worst hit, while the overall records show an alarming 32% increase in repossessions year-on-year
Andrew Clark in New York guardian.co.uk, Thursday 13 August 2009 -- Home repossessions have rocketed to a new high in the US as a tide of misery sweeping through the mortgage market stubbornly resists large-scale programmes by the Obama administration to keep struggling borrowers from losing their houses.
Foreclosure documents were filed on 360,149 properties during July – a rise of 7% on the previous month, and a 32% increase year-on-year. It was the third time in five months that foreclosure activity set a new record.
America's repossession capital was the desert casino city of Las Vegas, where foreclosure documents were filed on one in every 47 homes. Nevada, California, Florida and Arizona accounted for more than half of US foreclosure activity, as a vigorous housing boom driven by rapidly expanding cities in the middle of the decade turned to a spectacular bust.
James Saccacio, chief executive of RealtyTrac, the online marketplace that compiled the figures, said: "Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions."
More than 860,000 families in the US lost their homes during 2008 as risky subprime mortgages proved unsustainable, and the figure is set to be even higher this year, in spite of a series of government initiatives pushing banks to amend delinquent loans to provide relief for struggling borrowers.
A $75bn (£45.2bn) programme established by the Obama administration in February provides incentives for banks to help borrowers. It is intended to help as many as 4 million homeowners, although figures released earlier this month revealed that banks have made "uneven" progress in refinancing loans, with 230,000 altered under the scheme to date.
One of the difficulties facing lenders is that job losses continue to mount, with recession-hit employers cutting more than a quarter of a million positions each month. When mortgage customers lose their jobs, they no longer qualify for refinancing as they generally have no means of meeting even cut-price repayments.
A surprise drop in retail sales delivered a further blow to economic sentiment. Figures from the US department of commerce showed that till receipts dropped by 0.1% in July, confounding analysts' expectations of a rise of between 0.7% and 0.8%. After stripping out car sales boosted by the government's "cash for clunkers" subsidy programme, retail sales fell by 0.6%.
Ian Morris, head of US economics at HSBC in New York, described the figures as disappointing: "Although 'cash for clunkers' will boost things in the short run, today's retail data is a reminder that excluding extraordinary stimuli, underlying consumer trends remain fragile."
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