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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (89917)	9/20/2007 11:06:07 AM
From: $Mogul	Respond to of 306849

What is unreal is that this has barely started. Inning 2-3 out of a 9 inning game. urrent Foreclosure Crisis Deemed the Worst in U.S. History Sep 14, 2007 According to the most recent foreclosure numbers released by the Mortgage Bankers Association (MBA), the U.S. is embroiled in the worst foreclosure crisis in recorded history. More than 14 percent of subprime borrowers are defaulting, and prime borrowers are beginning to follow suit. MBA Report Summary The foreclosure rate recorded in the last quarter has increased beyond the highest point seen in the history of the MBA survey, which dates back to 1953. 14.82 percent of subprime borrowers are currently behind on their home loans. The highest percentage of foreclosures are on homes with 2/28 adjustable rate mortgages. In states with severe foreclosure issues, like Michigan, one in every 100 homes is in some stage of foreclosure. Is the Worse Yet to Come? According to the most recent Mortgage Bankers Association survey, the foreclosure crisis is deepening. States like California, Nevada, Florida, Arizona, Michigan, Ohio, and Indiana saw foreclosure rates skyrocket in the last quarter, and the problem is expected to get worse before it gets better, according to Doug Duncan, MBA's chief economist. 'We will see delinquencies and foreclosures rise for another quarter or so. Home prices are falling as rates are resetting higher, making it difficult for people to refinance,' said Duncan in a conference call with Bloomberg.com. The problem lies mainly with subprime borrowers, who are defaulting in increasing numbers. In the last quarter, 14.82 percent of subprime borrowers were behind on their loans. In comparison, 2.6 percent of prime loans were more than 30 days past due. According to the MBA, the infamous 2/28 adjustable rate mortgage and depressed economic conditions are key factors in the foreclosure crisis. With more ARM resets expected for this year and next, it is likely that the foreclosure rate will only continue to increase in coming quarters. Sean O'Toole, founder and CEO of ForeclosureRadar.com, says the crisis will also be compounded by the number of speculators who are folding after buying during the boom. 'Many blame subprime lending for our current real estate crisis, but rampant speculation, even by those with great credit, played a leading role,' said O'Toole in a press release. 'The subprime market took the first hit as those borrowers had the least to lose when they walked away. Now that nearly half of foreclosures represent non-owner occupied properties, it is clear that speculators are walking away too.' It is true that non-owner occupied properties have been hitting the auction block in record numbers. Of the 9,477 properties auctioned in California last month, 44.3 percent of them were speculator owned properties. Another shocker: 90.3 percent of the homes were bought or refinanced in 2005 and 2006.