Foreclosure Industry Is Booming

While the foreclosure industry prospers, the housing crisis hasn't even peaked.

ByJeffrey Kofman

May 23, 2008— -- If you want a sense of the scale of the mortgage meltdown in this country, tag along with Sean Zawyer and Seth Gissen for a day. They are process servers, sworn officers of the court, hired to deliver bad news. Their company delivers about 5,000 foreclosure notices in the Miami area each month.

"I don't even know if there's words to describe the number of foreclosures that are coming out," Zawyer said.

"Amazing, because we've been in business for 10 years and grown steadily, 20, 30 percent, steadily. And in a year and a half, you double an existing business."

They now have 55 employees — 25 in the office and another 30 servers who deliver foreclosure notices.

Zawyer and Gissen are not the only ones kept busy by the foreclosure crisis — so are moving companies, as banks evict owners who fall behind on their payments. In Rockwall County, Texas, the sheriff is called in to evict about six families a week.

On the other side of the country, outside Los Angeles, there's a booming industry in preparing repossessed homes for resale. Two years ago, WSR Preservation Services, a California property maintenance company that specializes in cleaning up foreclosed homes, had 10 employees. Today, they have 60.

"We have bicycles, we have toys, you know. Again, this was probably a nice little family who could just not make the mortgage payment," John Plocher, president of WSR Preservation Services, said as he surveyed a home in suburban Los Angeles that had clearly been abandoned in a hurry.

Some families are locked out by the sheriff while others just disappear.

Back in Miami, Gissen and Zawyer knock on doors well into the evening to search for the owners of foreclosed properties. But finding the owners is becoming more and more challenging. "Probably 70 percent of the properties are either vacant or they're occupied by renters. The owners are very rarely there," Gissen said.

No one ABC News talked to thinks we have seen the worst. Most real estate experts say the bottom of the market is at least a year away.

Guy Cecala is the publisher of Inside Mortgage Finance, an industry newsletter. "It will be close to the middle of next year, 2009," he said, "before we can say, 'OK, I think we have peaked in terms of foreclosures. We can look and expect to see some kind of improvement going forward.'"

Cecala said this is the first time since the Great Depression that the U.S. has seen foreclosures nationwide.

"I'm sort of pessimistic about the foreclosure outlook. We've seen this before on a regional basis and it's like a big oil tanker — it doesn't stop on a dime," he said.

But Cecala noted that it may be a good time to buy a home. "I think we're going to see some upturn and significant improvement in the ability to buy houses and mortgage activity, starting this summer. You can only foreclose so quickly, and we haven't gotten through all the bad loans out there. There are a lot of people who are delinquent or sitting on the fence, waiting to see if a lender is going to foreclose on them or try to work out the loan or do something else."

At the county foreclosure auctions in Miami, there are more properties for sale than ever. Yet long-time buyer Luis Valdeon wasn't bidding. He said the banks are offering surprisingly few bargains, and is confident that will change soon.

"Banks will be so full of properties, they're going to be discounting them because they can't rent 'em, they can't do anything with them, so they're going to start lowering them," he said.

One of the few areas of growth in the economy these days is the foreclosure industry.

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