Mortgage Foreclosures in U.S. Rise at Fastest Pace in Almost Three Decades

[Purveyor]

Source: Bloomberg

By Kathleen M. Howley

Sept. 5 (Bloomberg) -- Foreclosures accelerated in the second quarter to the fastest pace in almost three decades as interest rates increased and home values fell, prompting more Americans to walk away from homes they couldn't refinance or sell.

New foreclosures increased to 1.19 percent, rising above 1 percent for the first time in the survey's 29 years, the Mortgage Bankers Association said in a report today. The total inventory of homes in foreclosure reached 2.75 percent, almost tripling since the five-year housing boom ended in 2005. The share of loans with one or more payments overdue rose to a seasonally adjusted 6.41 percent of all mortgages, an all-time high, from 6.35 percent in the first quarter.

Tumbling home prices are making it difficult for even the most creditworthy owners with adjustable-rate mortgages to sell or get a new loan as their financing costs rise, said Jay Brinkmann, MBA's chief economist. Prime ARMs accounted for 23 percent of new foreclosures and subprime ARMs were 36 percent, he said.

``People chose the lowest payment option to get into some of the very expensive housing markets and now that prices are coming way down, they can't sell and they can't afford the higher payments,'' Brinkmann said in an interview.

The three-year-old housing slump has slowed growth of the world's largest economy, caused more than half a trillion dollars of losses at banks such as Citigroup Inc. and UBS AG, and crimped earnings for companies such as Home Depot Inc. and Lowe's Cos. that rely on home purchases to fuel demand.

Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=aMn7WL5p0Q6Y&refer=home

[kurth_]

1. We're fucked

[SheilaT]

2. When I see something like this

my first question is, what was the foreclosure rate like thirty years ago? Was it worse than this. On the other hand, the second paragraph indicates the survey has only been around for 25 years, so maybe a good comparison to any other point in our history isn't possible.

I just don't like numbers and statistics standing out there without any context, that's all. I'm not trying to imply that the foreclosure rate isn't a problem.

[cosmicone]

3. This doesn't have any impact whatsoever

on the people who don't even know how many homes they have.

Just another scare tactic of the liberal elite and propaganda of the liberal media. </sarcasm>

[krkaufman]

8. This doesn't have any impact whatsoever ...

... on those people who walk around with the cost of a sizable new home dangling from their earlobes.

[Ian David]

4. Fastest pace since Reagan was President. n/t

[slackmaster]

5. Carter

Reagan took office on January 20, 1981.

[Ian David]

6. Bush is even worse than Jimmy Carter? Oh, wow. n/t

[HomerRamone]

7. EIGHT MORE YEARS! EIGHT MORE YEARS! nt