Wow. Just....wow. http://www.nytimes.com/2008/06/06/business/06mortgage.html Nearly 1 in 10 American Homeowners Face Problems With Loans By MICHAEL M. GRYNBAUM Published: June 6, 2008 Nearly 1 in 10 American homeowners faced foreclosure or fell behind in their mortgage payments in the first three months of the year, according to a report released Thursday, a figure that offers a look into the toll caused by the collapse of the housing market. The period from January to March marked the worst quarter for American homeowners in nearly a quarter-century, according to a widely watched report put out by the Mortgage Bankers Association, a trade group. Both the rate of new foreclosures and late payments surged to the highest levels since 1979. (The delinquency rate includes Americans who are more than a month past due on their home loans.) A breakdown of the statistics showed problems at nearly every level of the mortgage industry. Of the 45 million home loans included in the survey, 6.35 percent were at least one payment past due, up from 5.82 percent for the fourth quarter of 2007. (All figures are adjusted for seasonal factors.) Foreclosure proceedings began on 0.99 percent of loans, up from 0.83 percent in the previous quarter. Over all, the percentage of loans being foreclosed on reached 2.47 percent in the first quarter, rising from 2.04 percent at the end of December 2007. The drop in home prices, which has affected a broad swath of the nationâs housing market, has left many homeowners paying mortgages worth more than their own homes. The housing slump is the worst of its kind since the recession of the early 1990s. The mortgage problems were worst for homeowners who took out subprime loans, which are usually issued to applicants with less-than-pristine credit histories. But even borrowers with solid credit records have not been immune. âWhile the foreclosure start rates were up for all types of mortgages, a reflection of the decline in home prices, the magnitude of the national increases is clearly driven by certain loan types and certain states,â said Jay Brinkmann, the groupâs vice president for research and economics. For example, he said, subprime adjustable rate mortgages represent 6 percent of the loans outstanding but 39 percent of the foreclosures in the quarter. Prime adjusted loans represented 15 percent of the loans, but 23 percent of the foreclosures started. âOut of the approximately 516,000 foreclosures started during the first quarter,â Mr. Brinkmann said âsubprime ARM loans accounted for about 195,000 and prime ARM loans 117,000.â Four states â Arizona, California, Florida and Nevada â accounted for about 89 percent of the foreclosures, a disproportionately high amount of the newly reported figures. Those regions have suffered the sharpest price drops. âThe problems in California and Florida are extraordinary, and they are the main drivers of the national trend,â Mr. Brinkmann said.
1 in 10 sounds dire. A national crisis. Yet 4 states account for 89 percent of the foreclosures. glad I don't live in one of those states, I might've missed my mortgage payment.
Well carp. Go to the original article which is a link inside the NYTimes article. See if you can figure out what's wrong with this story. Here are just two things I found or didn't find. 1) There is no mention that 89% of anybody is responsible for the foreclosures, much less only 4 states. I have no idea how they came up with that number. The number I found for those 4 states was 42%. There were several states whose foreclosure rates went DOWN. That means the remaining states were responsible for about 1+% each. 2) Assuming 40% of us don't have mortgages but own homes, I found some numbers here http://ask.yahoo.com/20060314.html, when 6.3+% of the 45M homeowners with mortgages are behind in their payments, this means about 3% of us are behind in our payments, not 1 in 10. Some journalist with 8th grade math figured this out.
And many of these foreclosures are "investors" who bought more than one house because they were going to flip it.
i live in Florida. it is very bad, at this point it is trickling into other parts of the economy. Small contractors that were doing remodelings or additions are done, tile,granite guys are done. Handyman are non-exsitent. Also survey companies and appraisers are down to thier last breath... Sounds like a bottom to me. Maybe a double bottom. All i know, when you look back in 10 years, you will be more happy if you bought now, than if you were selling now. EF...
And many of these foreclosures are "homeowners" who only had that house, and no other realestate investments to speak of. -----