I, for one, never thought things would get this bad....
Nearly 6% of all mortgages were delinquent nationwide in the fourth quarter and foreclosure starts were at the highest levels ever, according to a report issued Thursday by the Mortgage Bankers Association.
Michigan continues to rank high for delinquencies and the number of homes in foreclosure. The state ranked second nationwide with 8.97% of its home loans more than 30 days delinquent during the three months ended Dec. 31. Mississippi was first with 11% of loans delinquent and Georgia was third with 8.37%. Michigan ranked third when it came to foreclosure inventory with 3.38% and third based on foreclosure starts with 1.29% during the quarter.
The total national delinquency rate of 5.82% is the highest in the mortgage bankers survey since it reached 6.07% in 1985, said Doug Duncan, chief economist for the mortgage bankers. The housing market bust could end up being even more dramatic than the long boom that ran from 1998 to 2005 and drove prices to astronomical levels in states like California and Florida. Those states are now suffering with a disproportionate share of foreclosure starts.
California and Florida represent 21% of loans outstanding and 30% of foreclosure starts. They also account for 18% of gross domestic product, Duncan said.
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1 comments:
Strategic Investor said...
I like Duncan's attempt to remind lawmakers that California is "important" (i.e. bail us out, please!)
This downturn is going to last far longer than earlier ones, because of the massive amount of negative equity in real estate. Low or negative equity will continue to feed high foreclosures for years to come. In rising markets, foreclosures peak in year 3, because thereafter HPA provides enough equity for refinance or sale. In down markets, 10 years or more might not allow for positive equity.