53% rise for U.S. Foreclosures: Property & Mortgages to blame

Peter — Thu, 10 Jul 2008 10:34:16 +0000

June is not a great month for U.S. foreclosures, as they rose by 53 percent from the same time a year ago. Things are certainly in a bad way as bank repossessions have almost tripled while property values mixed with higher payments on adjustable mortgages forced many people to give up their homes.

The startling facts are that more than 250,000 properties or one in every 501 households are now in some stage of foreclosure, this is according to a statement issued by RealtyTrac Inc., an Irvine, California-based seller of default data.

In that report, RealtyTrac Inc. state that the highest rates for foreclosures are in Arizona, California and Nevada. Moody’s Economy’s chief economist, Mark Zandi, has said “The foreclosure problem is getting worse and will stay with us well into the next decade.”

Since the spring in 2006, about $3.5 trillion in homeowner equity has been wiped of housing prices from when they were at their peak.

Around 53 percent of borrowers, who have subprime loans for those who have poor or incomplete credit histories, will almost certainly be in negative equity by the end of the year, this number will rise to around 63 percent by 2009.

Read the full article from Bloomberg

Freddie Mac & Fannie Mae committed to raising more capital

Peter — Tue, 08 Jul 2008 22:06:56 +0000

Henry Paulson, the U.S. Treasury Secretary has been saying how pleased he is that Freddie Mac and Fannie Mae are committed to raising more capital this spring, he also commented about the reform of the government-sponsored enterprises, saying that is the best way to combat foreclosures.

Paulson also went on to say that foreclosures will hit about 2.5 million in 2008; this is compared to 1.5 million in 2007 and just 800,000 in 2004 however; that was back when the economy was strong. Paulson has said that the best way to prevent foreclosures, was GSE reform, this is the largest step that congress can make to help assist in the necessary correction.

Paulson also added that the inevitable correction process is well under way, he made the point of saying that overhang of supply for single-family unit housing down 21% since the peak in back in 2006.

Existing home sales seems to have flattened over the past several months, this is yet another sign that we are well in to the adjustment process, this indicates that demand might just be stabilizing; this is according to Henry Paulson.

Foreclosures looks set to continue for some time yet however; with the Hope Now Alliance, it looks as if it is making some progress to ward off preventable foreclosures.

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Mortgage and Business News » foreclosures

53% rise for U.S. Foreclosures: Property & Mortgages to blame

Freddie Mac & Fannie Mae committed to raising more capital