Our sister publication, Consumer Reports, put together some video interviews with people who, for one reason or another, are facing foreclosure. They are the human side of this financial meltdown.
The Mortgage Bankers Association says that foreclosures have hit an all-time high as more and more borrowers with adjustable rate mortgages walk away from their homes before their payments increase.
Here’s one that’s sure to start some intense debate: If you’ve made a bad investment and your house isn’t worth what you thought it was going to be, is it OK to just walk away?
Sheila C. Bair, the chair of the FDIC, suggests that lenders “restructure all 2/28 and 3/27 subprime hybrid loans for owner-occupied homes in cases where the borrower has been making timely payments but can’t afford the reset payments. Convert these to fixed-rate loans at the starter rate.”
Countrywide is catching hell from consumer advocates who say they’re not doing enough to help the homeowners they’ve foreclosed on.
It must not be fun around WaMu headquarters today. Profits are down a whopping 75%.
In the spring quarter, 25 percent of the foreclosures were in the city itself. The numbers are up even in Belair Edison, a stable working-class neighborhood of neat, two-story row houses adjacent to a picturesque wooded public park.
Foreclosures “zoomed” in August, up 115% from last year and 36% from July according to the newest numbers from RealtyTrac. This is the beginning of one of three remaining waves that will hit the market in the next year. This wave is expected to peak in October as 2 million 2/28 ARMs reset to market rates and an estimated 600,000 homeowners can no longer afford their payments.
WaMu, the nations largest Savings & Loan, is going to stop issuing certain risky types of subprime loans.
Many consumers who signed up for adjustable rate mortgages in 2004 and 2005 will see their mortgage payments jump this October, according to CNNMoney. With foreclosure rates already as high as one foreclosure filing for every 656 households in the US, this can’t be good news.