It is easy and often dangerous to jump on any one set of figures as proof of an emerging trend, tempting though it may be.
But when times are tough, like they are now, a lot of people who should know better are too quick to pounce on statistics that may be creating a false impression of improvement.
Such is the case with this one website I came across, DSNews.com, where the writer begins by saying, “The new year seems to be getting off on the right foot.”
In this case, the writer refers to figures just out from Bank Foreclosures Sale, described in the post as “an online provider of foreclosure listings and information.”
The figures would seem to indicate that foreclosure rates in states across the nation were” significantly lower in January.”
The problem is that there is a good reason why the foreclosure rate seemingly dropped in the reported period: Many distressed homeowners have been trying to get permanent mortgage modifications. Though relatively few have managed to do so, a fairly large number of people are enrolled in the mandatory three month trial period before their lenders let them know whether they will gain a more long lasting solution to their woes.
A fairly large number of distressed homeowners will soon learn whether they will get the much desired permanent mortgage modification. Those who do not, face foreclosure for sure.
And, even those who do, may still end up going into foreclosure down the road because loan modifications usually only bring down interest rates but do nothing to increase the homeowner’s equity.
So, forget about the appearance that the new year is getting off on the right foot….let’s talk toward the end of this year and see how things shape up when the other shoe drops.