New foreclosures at record high Mortgage delinquencies rise across the board in fourth quarter By MarketWatch Last Update: 12:07 PM ET Mar 13, 2007 CHICAGO (MarketWatch) -- Many more U.S. homeowners were unable to keep up with their mortgage payments in the fourth quarter, the Mortgage Bankers Association said Tuesday, with the rate of homes entering the foreclosure process hitting a record 0.54% and the delinquency rate on U.S. home loans leaping to 4.95% from 4.67% three months earlier. "Although the U.S. economy and job market remain solid, the housing market continued to decelerate in the fourth quarter of 2006. Nationally, house prices increased at a slower rate and the pace of sales and construction activity continued to slow," said Doug Duncan, MBA's chief economist. The rise was led by subprime mortgages, where delinquencies increased to 13.33% from 12.56%, and FHA loans, which saw a record-high delinquency rate of 13.46%. Trouble in subprime mortgages, made to borrowers with the riskiest credit, has roiled lenders and the stock market in recent days. Doug Duncan, the MBA's chief economist, said the jump in delinquencies was expected given the housing-market slowdown and that the shakeout in subprime lending should restore equilibrium to that market shortly.
We all saw this coming. I laughed when ppl told me 3-4 years ago, oh no it's different now. Southern CA is going to become the West Coast version of the French Rivera! Ba Ha Ha! Prices aren't going to go down, but just up. This came from a well respected realtor. Don't worry Dan just get an interest only loan and buy before it's all gone! Now granted, they are higher and always have, and will be, than say living inland for the coastal premium. The part of me that stops laughing is when I think about some of these folks defaulting in my neighborhood and driving my home value down.
"Leaping". Hmmm...How about "Rocketing", or better..."Sky Rocketing" for some serious journalistic hyperbole. For fun, I wanted to put this in perspective, so I went to the U.S. HUD site and did some cruising around trying to find historical perspective on foreclosure rates. I found that in the early 80's homes entering the foreclosure process ran at about half a percent, and from the mid to late 80's it ran at around 1%...about double to what it is today. Thats all the info I found on that graph. I invite you to do the same...for some reason my computer wouldn't let me copy the link with the PDF on it. Found it by searching on the key words, "foreclosure rate" Yeah...the late 80's. I remember the mass hysteria that set in at that dark, dark, time. The chuds would come out and eat the flesh of the living. Oh wait...thats hyperbole too... SM