Green Shoots on Fire?
August 20, 2009
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More than 13 percent of American homeowners with a mortgage are either behind on their payments or in foreclosure as the recession throws more people out of work, the Mortgage Bankers Association said Thursday.
The record-high numbers in the report are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment.
One in three new foreclosures between April and June was from a prime, fixed-rate loan, up from one in five a year earlier. Last year, subprime adjustable-rate loans caused the largest share of foreclosures.
If enough homes in a neighborhood are in foreclosure, the value of the remaining homes are distressed as well. At this point, you have to ask yourself, how many of the above homes are delinquent with property taxes. What will this do to rising state and local revenue deficits?
There is only so much further we can cut.....before we are all cut.
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