According to a news story reported by the Associated Press,
According to a news story reported by the Associated Press,
The number of house owners receiving foreclosure notices reached an all-time high this spring,
being particularly propelled by issues regarding the now infamous subprime loans.
All in all, The Mortgage Bankers Association or MBA stated today that mortgage-holders beginning the
foreclosure process in the spring quarter this year reached 0.65 percent, which is, shockingly,
the 3rd straight quarter that this quantity has set an all-time high.
Unfortunately, the delinquency rate was likewise up substantially during this same period,
rising to some 5.12 percent of all the loans, up nearly 3/4 of a percentage point from the same period last year.
Obviously, that could mean yet another record setting foreclosure rate for the next quarter.
This poor performance has been apparently driven by 2 major factors — major job losses in the states of Ohio, Michigan & Indiana
as well as the collapse of the formerly booming real estate markets in such states as California and Arizona.
Sadly enouph, The Midwest in particular has been severely affected by a loss of jobs in manufacturing, such as in automobiles.
During a 5-year real estate boom, the prices in some areas of the country, like Florida and California, for example, surged upward. Unfortunately, this created
a dangerous speculative bubble as investors bid up the price of houses so as to swiftly resell them for a big profit.
With house sales falling however, the quantity of unsold homes rising as prices continue to stagnate, some speculators want to default on their loans
and basically cut their losses. In addition to all of this,
up to two million ARM loans are scheduled to reset this year at much higher interest rates, which will make monthly payments in certain cases to go up threefold,
a problem which is particularly major in the market for subprime mortgages. Sorry I couldn’t add any good news on this topic.