JOB LOSSES FUEL UPTICK IN FORECLOSURES!
ONE IN 10 HOMEOWNERS AT LEAST ONE MONTH BEHIND, 4% IN FORECLOSURE - NATIONAL DELINQUENCY SURVEY!
U.S. Foreclosure Figures continue to rise, on the heels of a continued weak employment outlook in many areas of the country. Indeed, according to the quarterly National Delinquency Survey, an estimated 10% of all U.S. Homeowners are at least one month behind in their mortgage payments. Of these 4% are at some stage of the foreclosure process.
As reported by Kevin G. Hall in the August 21st Edition of The Chicago Tribune, the states where the numbers of distressed homeowners are the highest - Florida and California. In Florida, 23% of all mortgages were at least one payment late, and 12% were at some stage of the foreclosure process.
The foreclosure percentage in California - not much better! Here, 10.8% of all mortgages statewide were at least 90 days or more past due, headed to foreclosure.
One disturbing trend among the foreclosure stats - holders of sub-prime loans, given to the most credit-challenged borrowers a few years ago - are beginning to represent a declining portion of the delinquency and foreclosure rates. Defaults on prime mortgage loans, given to the best borrowers, are finding a rising share.
During the Second Quarter, 2009, prime fixed rate loans ticked higher in 41 states across the U.S. Holders of prime mortgage loans represented 1/3 of all new foreclosures, compared to 1/5 of all foreclosure starts one year ago.
Taken together, prime mortgage loans represent 65% of all outstanding U.S. Mortgages, but more than 39% of all foreclosures initiated during the Second Quarter. During the Second Quarter, 2008, prime mortgages accounted for 17% of all loans in foreclosure. As of the end of the Second Quarter of this year, these foreclosures accounted for 27% of the total.
Falling prices on foreclosed homes in the banks' hands have attracted many new buyers seeking steep discounts. However, some economists feel that predicted continued high levels of foreclosures will keep prices from bottoming out for some time.
As unemployment numbers continue to climb, more people will likely default on their home loans. Without jobs and income, these homeowners will not qualify for relief offered through President Obama's Making Home Affordable Program encouraging Loan Modification. This adds to the already bloated supply of foreclosed homes for sale, while at the same time curtailing the available pool of buyers, as many prospective buyers might sit on the sidelines, fearing for their continued employment.
Many experts predict the current average U.S. Unemployment Rate of 9.4% is likely to peak around 10% or so.
DEAN MOSS & DEAN'S TEAM CHICAGO
