Foreclosure Filings are Sky High
Lots of American homeowners are in deep trouble: Homeowners who bought in the last few years and need to sell now, even though the value of their home has dropped; those who took on mortgages that exceeded their ability to pay; and so on.
In fact, the number of homeowners facing foreclosure jumped 57 percent in January compared to a year ago, according to an Associated Press story released today on the foreclosure crisis. There have been attempts to bail out homeowners who are ‘upside down’, but the effects have been limited to useless.
Let’s review some of the statistics:
The top 10 states with the highest foreclosure rates are: Nevada, California, Florida, Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan.
The three metropolitan areas with the highest foreclosure rates are: the Cape Coral-Fort Myers area in Florida, with one of every 86 homes in some stage of foreclosure. Stockton, Calif., was ranked second, with one of every 97 homes involved in a foreclosure filing. Riverside-San Bernardino metro area in Southern California was ranked third, with one of every 101 properties.
Millions of homes will go into foreclosure by the end of all this, and my opinion is that we are very much still in the downward mode and nowhere near recovery.
February 26th, 2008 at 5:01 pm
They need to throw predatory lenders into jail. Any lender, who lends money for a mortgage under conditions, a reasonable money manager should know will require a day of reconning , is involved in a fraud.
There was a time you could not get a mortgage unless you put down at least 25% of the price. And no more of your net income than 25 % should go toward housing. A 40 year mortgage was unheard of. 20 year mortages was the standard. Who changed the lending rules guidelines.!!
February 26th, 2008 at 9:37 pm
Unfortunately, there is around $1.7 trillion in equity still left in homes across the nation. Guess what, the government wants that $1.7 trillion being spent in the economy rather than tied up as equity in homes and lenders will comply. Our current president has borrowed more in his term than all presidents combined before him. The Euro hit an all time high against the dollar today. I could go on. Suffice it to say, it is not just housing. It is just that housing is the most visibile sign that the “living beyond our means” approach to economics is coming apart.
February 27th, 2008 at 5:08 am
Sadly, I doubt that future administrations are going to do anything about excess government borrowing.
A bright spot. A corollary of the ridiculous mortgage lending/borrowing tactics of recent years and the inevitable burst of the bubble is that home prices are falling, and perhaps ordinary folks will, in the near future, be able to purchase homes without getting in over their heads. Maybe.
February 27th, 2008 at 10:06 am
[...] Oh, and one more thing. In January, the number of homes that faced foreclosure skyrocketed 57 percent from the previous year. Let’s say that again: 57 percent! [...]
February 27th, 2008 at 9:00 pm
Gerry, I am one of those ordinary folk.
February 28th, 2008 at 7:22 am
We had a similar situation in the UK in 91/92 when the GB pound was linked to the Euro and it went crazy for a year – and here’s the thing that I don’t understand about that time…
A lender who is happy to lend 100% (or near 100%, or as in the UK more than 100% !!!) of a property valuation is accepting the long term investment aspect – why should that lender, however far down the chain of lending they are, suddenly decide that they want their money back even if the borrower cannot make the total monthly payments in the short term ?
A borrower who is able to take a 20 or 25 year decision on a property should have the balls to tough it out, reduce the payments to the borrower for a short time, extend the period of the loan if necessary, unless they have been involved in a property over-valuation fraud then they should know that its still a good long term investment – so where is the urgency and panic ?
March 20th, 2008 at 2:07 am
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