For those of you hoping that foreclosure crises has hit bottom, we’ve got some bad news. A new report released by the The Pew Charitable Trusts says that 1 in 33 homeowners is expected to be in foreclosure over the next two years, due primarily to subprime mortgages made in 2005 and 2006.
The report goes into detail about how each of the states is dealing with the mortgage meltdown. Everyone is affected, even those without risky mortgages.
More than 40.6 million homes across America are projected to lose value because of subprime foreclosures in their communities, and foreclosures may cost neighboring properties up to $356 billion in home value over the next couple of years, says the report. Also sobering is the news that foreclosure starts involving prime adjustable-rate mortgages increased 158 percent in one year.
The report also claims that the mortgage meltdown isn’t a regional problem for hard-hit states like California, Nevada and Florida. It’s national.
As Exhibit 1 illustrates, nearly every state is feeling the impact of the crisis. A report by the
MBA in March 2008 showed that in 47 states and Washington, D.C. mortgage loans entering foreclosure as of December 2007 had increased by at least 20 percent since December 2006.Only three states–Alaska, Montana and Vermont Vermont–did not experience at least a 20 percent increase in foreclosure starts; less than 1 percent of the American population lives in those states.
You can read the entire report by clicking here (PDF).
Defaulting On The Dream (PDF) [Pew Charitable Trusts]
(Photo:Jimmy Legs)
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@Pope John Peeps II: I thought you guys were still on strike…
Sweet, maybe I’ll actually be able to afford a house at some point, after the market craters.
I hope the government doesn’t bail out these shitheads. You made a horrible decision, morons, now enjoy bankruptcy and foreclosure.
@GearheadGeek: For someone who has your screenname, you really need to learn some code.
@iMe2: So, you’re telling me at CA is at 5%. Still doesn’t seem like a big number to me. CA is 2% over the national average.
My point was that the X in X notation made the number seem higher than when listed as a percentage.
@GearheadGeek: Good point, I neglected to mention that. But it can also be true that an area with a lot of foreclosures can also have more vacated properties (ie the “slum-ization” effect mentioned by Eyebrows McGee), which was more along the lines I was thinking. Nevertheless I will refrain from using the term “double-whammy” in the future as, on reflection, it sounds ridiculous.
No one spotted the Vermont Vermont?
@Elvisisdead: (1/20)/(1/33) = 1.65 – so California’s rate of foreclosure is actually 65% over the national average, which is huge given that “the number of mortgage loans entering foreclosure as of December 2007 had increased by at least 20 percent since December 2006.” (from the article)
@Elvisisdead: And how is that? In the language I use primarily in my work, != and are both treated as “not equal to.” Perhaps you just need to learn MORE coding languages, if you think that’s not so.
@GearheadGeek: Bloody hell… it ate the “less-than symbol followed by greater-than symbol” in my response, thinking it was part of an HTML tag I’m sure. Makes it look like there’s just a blank after an and.
@coraspartan: Well, the good news is that I don’t think the housing crisis is the real problem. Bad news is, even if the national housing market hadn’t crashed, you’d probably have a hard time finding a buyer — who wants to move here? We don’t have any jobs!
/love the state, hate the economy
@Pasketti: You do not know that the document was meant to be read on a computer screen. It looks like it was meant to be a color printout brochure/packet. The pdf file was posted for our convenience.
I submit a quick history lesson. 3.3% is not that bad.
[cei.org]
@Thorny: Thanks Thorny, I was wondering what the historical numbers were and found it weird that the report didn’t provide that context.
That being said, the following is troubling:
“Today, the foreclosure rate stands at between 1.4 and 1.5 percent (about 1.5 and 1.6 million mortgages in foreclosure); even the most pessimistic estimates do not show it rising about 2 percent.”
…well, 3% is a lot higher than that.
Well, won’t be us! We got a 5% fixed loan in December, NYS Star tax and Veteran land tax exemptions… our mortgage is cheaper than renting now!
But, some are not so lucky. Or smart to sign up for a variable APR…
@GearheadGeek: Yeah. Learn some code.
@laserjobs: most banks sold off the mortgage a long time ago.
@xboxishuge: the impact of these bad decisions if just impacting them would be ok. But since it can drive down the rest of the neightborhood, Bear Sterns, etc., that is a pretty ignorant statement. Especially since lenders did nothing to validate incomes. Additionally, people who qualified for the 30 year fixed rate loans were sold a bill of goods to get the adjustable rate loans instead. This has probably happened way more than people realize given the FBI’s investigation into it. People that are not qualified for loans should have never received them and people qualified for better loans should have gotten those. Perhaps you don’t mind what could be the worse economic downturn since the great depression, but I sure as hell do. At least we know that this means McCain has no chance.
@ViperBorg: Vermont, Vermont is just like New York, New York, but with more syrup and fewer production numbers.
@hi: actually no, it’s 1 word and one abbreviated slang “word”.
I’m about to buy my first house, and for better or worse, the market slide has worked in my favor so far. I’m trying to buy a large house with lots of room to grow into with the intent of living there long-term, so short-term value slides aren’t a concern (the quiet suburb we’re moving to has held onto property values quite well, too). Because of the as-late slash-happy Fed, I’m getting an interest rate so low on my fixed rate mortgage it would have been unheard of a couple years ago. Finally, the deluge of homes going up for sale has pushed listing prices of homes down in my area, allowing me to buy more home for my dollar. My wife and I have very stable jobs with a strong debt-to-income ratio so I’m not very worried about losing the house after we buy.
I feel bad for people who are in a situation to lose their homes, but this is an advantageous time for people looking to buy a new home like us. I read somewhere that national home sales increased 3% in the last month, so it looks like others recognize the opportunity too.
Not to worry. The government will use your hard earned tax dollars to see that no bank or mortgage institution will long suffer. Home owners, on the other hand….
I am supposed to feel bad for people who probably falsified their earnings in order to qualify for terrible mortgages?
No thanks. But I will take your house for 50% of what you paid for it.
@Juggernaut: Maybe we were raised differently. A house is a place to raise a family, not an “investment” or a fall-back savings plan. “If the need arises” I fall back on my savings. If I deplete that, I dig into my long-term savings. I guess we’re from different generations.
i’m trying to imagine how the statistic could have the most oomph: 1 in 33
3.03%
more than twice than 1.5%!!
30 in 1000
either way, it seems like less than i would expect from this debacle. i’d imagine there’s plenty of the other 97% that are just as irresponsible, but will just get lucky.