Foreclosure Numbers Reaching Epidemic Proportions
- The Bonez
Although the foreclosure rate throughout the Marin real estate market, excluding a couple of areas, is not as bad as some markets, foreclosures across the country are growing at an alarming rate. Nearly one out of 8 homeowners are currently affected. It's no small irony that the economy, facing a downturn caused largely by the collapsing housing market, is leading to the current housing crisis to spread. A report released Thursday showed that nearly 12% of mortgage holders(a record-high 5.4 million homeowners) were behind or already facing foreclosure at the end of 2008. The 12% is a rise from 10% in the third quarter and 8% at the end of 2007. Moreover, the numbers now include many homeowners who qualified for fixed-rate loans. The report also showed that a whopping 48% of those with subprime adjustable-rate loans are behind or face foreclosure.
Careless lending and borrowing in states like FL, CA, and NV, are no longer the primary driving force of the country's rising delinquency rate. Instead, defaults are on the rise in LA, GA, NY, and TX, where rising unemployment rates are wreaking havoc on the economy. The Labor Dept. on Thursday reported unemployment claims at 693,000. The alarming trend represents one of the biggest hurdles facing President Obama's housing aid plan which was launched this week. While the $75 billion plan may help up to 9 million homeowners refinance their mortgages, unemployed people will find difficulty in qualifying for loans. The type of people joining the unemployment lines are an important factor to understanding the housing crisis. Unemployment for those with college degrees or technical training has doubled over the last 6 months. These are the people who are most likely to own homes and qualify for prime fixed-rate loans.
The House is expected to pass legislation that will award bankruptcy courts the power to rewrite loans. The intent of the legislation is that struggling homeowners will have more bargaining power with lenders. The Senate is expected to explore similar legislation in the coming weeks. The only positive aspect in the foreclosure report was the declining delinquency rate for subprime adjustable-rate mortgages. They are seeing the lowest delinquency rate since early 2007. This does not comfort Florida, where 60% of subprime A.R.M. holders are behind and 1 out of 5 homeowners who have a mortgage have fallen behind. Even once-healthy real estate markets like Houston and New York are experiencing problems. The unsold home inventory in Houston rose to a 17-month supply in February, compared to an 8-month supply the previous month. And in New York where financial industry jobs are disappearing at an alarming rate, many homeowners whose credit rating had been excellent are currently or will soon be in default.
Search Fibits for cd's
Todd Snider Cd's
Will Kimbrough Cd's
Guns n Roses Cd's
Pearl Jam Cd's
Dave Matthews Cd's