Record Number of House Owners Is In Foreclosure

December 9th, 2008 | Tags: Foreclosure

A record 10% of house owners across the country are in foreclosure during the third quarter of this year according to a report of Mortgage Bankers Association. California with a staggering 19% is the worst contributor to the worsening situation. Florida was not far behind. The loans due over a month or are in foreclosure, increased from 7.3% in 2007 to 9.25 this year during the same quarter. In Florida towards the end of September 7.3% of the house mortgages were in foreclosure. In California it was 3.9%. The national figure was 3%.

The Mortgage Bankers Association commented that the figures would have been higher if the national programmes to prevent foreclosures had not been in motion. Many loans are being modified and this is somewhat saving the situation.

The crisis has put a halt on further mortgage sanctions and the situation has worsened with recession. With loss of jobs the prime mortgages are also slipping into foreclosure.

In November there has been 533,000 job cuts – this being the highest in 34 years. In California the unemployment rate is over 8%. There has been a decline of house prices in the state by 40% causing further foreclosures according to Jay Brinkmann of Mortgage Bankers Association. California holds 13% of all the loans in U.S.A. and is responsible for 19% of all foreclosures. Brinkmann said, “California has lost more than 100,000 jobs over the past year, compared to Michigan, the usual poster child for unemployment, which only lost 70,000.”

Thomas Lawler is a housing expert from Virginia. He said, “Things are going to get worse before they get better.”

A cursory glance shows that the troubles in California are the same as other parts of the country with less than 7% of the borrowers in the state as well as the nation being behind payment schedules. But a clear picture comes through upon comparing the number of fresh delinquencies entering foreclosure zones in a quarter with the quarter preceding it. This is known as the “roll rate”, and the numbers are shocking and without parallel.

Delinquencies on all types of loans, including the conventional prime ones are on the rise. However the sub-prime mortgages continue to be worst affected.

The only bright spot in the report is that foreclosures have just started to taper off slightly perhaps because of the mammoth measures being taken by the government at all levels, local, state and federal as well as community steps.