NOD Filings Down by 30% Cause for Celebration...Hardly.

NOD Filings are down 30% over this time one year ago. Many are saying the sky is no longer falling and foreclosures are leveling off...hardly the case.

According to Rich Sharga of RealtyTrac, the NOD number is down ONLY because banks and lenders are not sending NODs to seriously delinquent homeowners. He believes this is a "managed slowdown" by banks and lenders to keep home prices from declining any further.

"We are seeing people in more and more serious stages of delinquency, who in a normal market long ago would have received an initial notice of default or been in the foreclosure process who are not there yet. I do think it is one of the mechanisms that the industry is using to manage supply and demand levels of this distressed inventory to keep the market from melting down."

Doug Duncan, the chief economist over at Fannie Mae, agrees with Sharga.

"The survey shows significant softness on the demand side of the equation, and if you are concerned about the broad based economic effects of significant price declines, if you were to bring large quantities of foreclosed or distressed properties onto the market suddenly, you would definitely put serious downward pressure on prices and that would have broad effects," says Duncan.

Also consider:

• August's record high of bank repos at 95,364
• A total of 338,836 U.S. properties in the foreclosure process
• 1 in 381 U.S. homeowners received foreclosure notices in august.
  Top five are:
  • Nevada - 1 in 84
  • Florida - 1 in 155
  • Arizona - 1 in 165
  • California - 1 in 194
  • Idaho - 1 in 220
• Home sellers nationally reduced asking prices 29 billion dollars in august.
• Interest rates as low as 3.96 aren't stimulating home purchases or refinances

Banks may "manage" seriously delinquent homeowner's by putting off the NOD process, but that hardly removes them from the foreclosure process. That is why we can expect to see foreclosures going strong through 2011.