Foreclosure, delinquency rates spike amid growing unemployment - washingtonpost.com

Foreclosure, delinquency rates spike amid growing unemployment - washingtonpost.com

By Renae Merle

Washington Post Staff Writer
Thursday, November 19, 2009; 12:10 PM

The share of homeowners delinquent on their mortgage or in foreclosure hit a new record during the third quarter, according to industry data released Thursday, which also indicates that the problem is likely to get worse through next year as unemployment rates continue to rise.

About 9.6 percent of borrowers were delinquent on their mortgage during the third quarter, according to the survey by the Mortgage Bankers Association, and 4.5 percent more were somewhere in the foreclosure process. Overall, about 14 percent of mortgage loans were delinquent or in the foreclosure process during the quarter, according to the group.

That is the highest level ever recorded by the survey, which has been conducted since 1972. That is up from 9.7 percent of borrowers who were in trouble during the same period last year.

The majority of the problem remains in the Sun Belt states, such as California and Florida, which accounted for about 43.4 percent of the foreclosures started during the third quarter. But loans insured by the Federal Housing Administration are making up a bigger part of the problem also, according to the survey. Of the foreclosures started during the quarter, 10.6 percent were insured by FHA, up from 7.8 percent during the same period last year.

Also, the challenge is also continuing to shift from the subprime loans that sparked the housing downturn to prime loans, which are traditionally considered safer and make up the bulk of the mortgages outstanding in the country. Of the loans in foreclosure during the quarter, about 55 percent were made to prime borrowers, compared with 37 percent that were subprime.

"The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve," Jay Brinkmann, MBA's chief economist, said in a statement. It "is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace. Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates."

The foreclosure problem is building despite a massive government program, known as Making Home Affordable, which pays lenders to lower borrowers' payments. The administration has said more than 600,000 borrowers have been added to that program this year.

Report: Foreclosure Crisis Hits Blacks, Latinos - ABC News

Report: Foreclosure Crisis Hits Blacks, Latinos - ABC News

Black and Latinos are at a disproportionate risk in the ongoing foreclosure crisis because they are more likely than whites to have higher-cost mortgage loans and face higher unemployment rates, a report says.

The report from the William C. Velasquez Institute called on the federal government to take steps, including reforming bankruptcy laws and expanding eligibility for mortgage modification efforts, to help combat the crisis.

Default Research Joins LinkedIn

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Beware of Swift Currents!

For one terrifying second, think about drowning and being trapped underwater. You would no doubt call for help and try to survive by any means possible. Now, it is not a life or death situation, but being underwater is also a dangerous place to be with regards to a mortgage when the owner owes more than the house is worth. So, let’s talk about all of the property saving techniques owners can use.

The lifesaver is to REFINANCE and get into a fix-rate loan that will start pumping equity into the property. This may take some time and may create a higher monthly payment. If you really want to keep your mortgage afloat, this might mean sacrificing a lot of things taken for granted – second cars, vacations, cable, cell-phone packages, etc. The money you put into your refinanced mortgage will gain you so much more than the amenities you give up in order to keep your head above water.

If you are sailing along in a conventional mortgage, your coast is clear. But, if your house payment has been floating on an interest-only or a pay-option ARM, you see sinking home values in your area and you have a high interest rate, now is the time to ask for help. Remember, unlike a person alone out at sea fighting swift currents, there are solutions to preventing your mortgage from realizing the same fate.

Class-Action Lawsuit Scrutinizes Foreclosure Procedures | Avvo News

Class-Action Lawsuit Scrutinizes Foreclosure Procedures | Avvo News

A Great “NO” From the Fed!

There was a quiet and positive sign from the Federal Reserve this week that the economy is continuing to improve and it came in the form of a big, fat, positive "no." It was a positive no from the Fed when they issued a statement about not being willing to up the lending rate. It is an excellent sign that this is even being discussed because the topic would never have come up in the first half of the year. Back then there was little indication of upswing to make higher interest rates a possibility. But now, enough progress has been made to even consider the option of raising the lending rate!

Since December of last year, the lending rate has remained close to zero, but emerging indications are that growth has increased by close to 3.5 percent during the third quarter of this year. There are several reasons for this gradual incline in the market, and much of it can be attributed to the incentives provided by the government, including "Cash for Clunkers", first time home buyer’s credit, and the economic stimulus package in general.

A positive "no" may seem a little confusing, but when you think about it, this is the Feds way of saying "yes we can" get out of this recession and we are!

COMMERCIAL BREAK; Time to Make Money

Whether or not you have considered growing your business through commercial foreclosures, now is certainly the time to begin! Using Default Research’s state of the art lists, you can easily separate the commercial properties in your area from the residential properties, and you are on your way to a Commercial Adventure!

Here are the top five counties with the current highest commercial foreclosure rate.

1. Los Angeles, CA

2. Miami-Dade, FL

3. Maricopa, AZ

4. Cook, IL

5. San Bernardino, CA

It is important to remember that commercial properties are not bought or sold like residential properties, and they can be a long term investment for you. They are rentable to companies who do not want to buy a property in the current climate, and can be bought low and sold high at a later time when the market has regained its normal behavior. Also, commercial properties have the potential of selling for remarkably less as a foreclosure than they would if they were sold on the conventional real estate market.

This commercial break is over for now – let’s go make some commercial deals!