The Rising Foreclosure Rate
Posted on March 24, 2009
Filed Under Florida Foreclosure |
The need for a foreclosure arises when a borrower is unable to meet the terms of mortgage. This means the inability to make the monthly mortgage payments. The lender repossesses the home of debtor thereafter. There has been a rise in the foreclosure rates over the years. The rate at which borrowers have been foreclosing has doubled in last few decades.
In 2005, many people took subprime mortgages, wherein people with higher-interest rates and tarnished credit reports are considered at higher risk. In the spring of the same year, there was a surprising hike in interest rates, which triggered off a subsequent rise in monthly payments for people with adjustable-rate mortgages. This created a strain when they decided to buy a new house, as the financial condition was unstable.
In addition to the rise in foreclosure rates, there has also been a rise in the home mortgage delinquency rates. This has affected the low-income families, who availed of high-interest loans.
In time, the foreclosure wave has tossed and turned dramatically. The major reason for this is the increasing popularity of the interest only and no document type of nontraditional mortgages. There was a phase in 2006, when experts were perplexed about whether the rise in foreclosures forewarned of any soft landing for the real estate market.
Present Day Foreclosure Rates
According to the U.S. Foreclosure Market Report, 130,511 new foreclosure filings were reported in the beginning of 2007. Compared to the 25% increase in January 2006, January 2007 indicates an increase of 19%. In addition, the report also indicates that there is a national foreclosure rate applicable to new foreclosure filings for every 886 U.S. households.
RealtyTrac is a leading publisher of the largest comprehensive national database of pre-closure and foreclosure properties. It publishes reports for over 800,000 properties from almost 2,500 counties across the country. In addition to this, it is the foreclosure data provider to Yahoo! Real Estate, MSN Real Estate and The Wall Street Journal’s Real Estate Journal.
According to certain reports by RealtyTrac, the foreclosure rates shot up by 27% from the previous month. However, this yearly predicted increase of 25% went way below the 45% yearly increase mark, which was observed in January 2006.
Foreclosure rates for some states-
Nevada took over Colorado in the race for the highest foreclosure rates. This is on account of the 8% increase in foreclosure filings in the previous month, plus a small decrease in Colorado foreclosure filings.
Michigan has had a 70% increase in foreclosure activity. This has placed Michigan in the second highest place among all states.
The third highest state for foreclosure is Georgia. It has been the highest state, for the fourth month in a row.
Colorado has been the fourth highest, ever since it claimed the top spot for nine months, in the year 2006. The other states that are also included among the nations top 10 highest states with foreclosure rates are Texas, Florida, Ohio, New Jersey and Illinois. There is no doubt that foreclosure and default rates have been rising.
Kris Koonar
http://www.articlesbase.com/non-fiction-articles/the-rising-foreclosure-rate-119879.html
Comments
7 Responses to “The Rising Foreclosure Rate”
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Would banks be smarter to lower the interest rate on people in the midst of foreclosure?
then to let the rising interest rates cause someone to lose their home
I am talking about people who took out an adjustable rate, and now it has readjusted and they can't afford it.
yes but that is not the business way
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The bad thing about all these mortgage backed securities is that they are bundled together by the thousands and sold to investors, mostly overseas.
They also split loans and put half and half into different securities.
There is also the factor of Credit Default Swaps which were used to insure investments. And even more so, that some people who didn’t even OWN these investments and even took out insurance on them. It’s similar to someone else you don’t even know taking out life insurance on you.
It’s a complex and muddy problem….
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If they were smart - or if they knew no one would bail them out - they’d refinance these people into reasonable fixed rate mortgages. Most of these people WANT to pay their mortgage, but can’t. Everyone would win if the financial institutions would stop trying to screw every idiot that comes along.
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But Moose most of those interest rates were reaching epic proportions, so it doesn’t matter except in the lending business. The Fed lowered interest a half percent which does nothing for earning.
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That only hurts them if they get an adjustable rate mortgage, GET A FIXED RATE MORTGAGE IF YOU BUY A HOUSE. I cannot over stress the value of that advice.
info about the housing crisis: http://www.youtube.com/watch?v=NU6fuFrdCJY
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They were part of the problem. They are part of the problem. There used to be a time when you went to the savings and loan to get a home loan, a commercial bank to get a checking account; and a merchant bank to get a credit card.
Never the train would meet.
Your S and L worked on helping you SAVE money and BUILD EQUITY in your home.
The commercial bank wanted to help you keep a checkbook and buy a car or get that small personal loan you needed to tide you over when you’re service truck went down.
The merchant bank wanted to finance your revolving credit like when you went on vacation or needed to travel.
Every one of them carefully limited your credit so that you would not get too far into debt without being able to pay it back.
Then banks decided it was more profitable to let you borrow as much as you wanted and then some, and then bundle it all up into securities and sell YOUR soul to foreign investors at a profit TO THE BANKS.
Guess they knew this day was coming, but shut their eyes to it and fooled all of us.
Welcome to the credit-expansionist economy that has plagued our nation since Jimmy Carter (1977). You can also thank Reagan, Bush I, Clinton and Bush II.
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