Of course this could be spun that 90 percent of Americans are on time with their mortgage payments during a very rough economic stretch.
Irregardless, we are facing some tough times in the real estate world. If there are that many homes in danger, selling a home normally is going to be facing some severe pricing pressure. Foreclosures will be dotting the landscape.
A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy.
The Mortgage Bankers Association said Friday the percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier. via msnbc.com.
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Wow! That is a high number, hopefully it won't get worse.
What a horrifically depressing statistic! Hopefully this is the bottom. I can't help but think that things can only get better from here.
It isn't pretty. In fact, it's sad to see how people will be so cavalier about an obligation that's made in good faith in most of thses cases. Sure, there's a lot of finger pointing to the banks, lenders and brokers. The "subprime" loans evolved directly in response to the development of the mandates made to Fannie Mae and Freddie Mac by our worthless Congress…especially Barney Frank who defended his position on the integrity of the loan progams developed to get lower income folks into houses.
It was an honorable plan in theory. There was little thought or calculation for the moment in time when these folks who could barely afford the home for which they qualified on a specific day ran into some financial problem. Most of these folks were a couple of pay checks away from bankruptcy as it was. How many giant screen TVs were purchased after the closing?
So, because the govt. was requiring Fannnie and Freddie to make loans to marginal borrowers who wouldn't normall qualify, a new field of lending was created to fill in the gaps left behind by the My Community and other NO Down Payment programs. This other market is the subprime lending that is scathed for being preditory.
There are some truely worthless people in the lending industry. There are (actually were) some worthless lenders….such as, Ameriquest who blatently fabricated/inflated house values.
There were worthlesss lenders like WAMU, Quicken Loans, Countrywide, et al who pushed loans that could have negative amortization (where you could actually pay less than the minimum interest payment). This would be a great loan for someone who had the financial accumen to use the loan properly. One way would be for someone who had several rental properties to adjust his monthly payment on a property in need of a renter. This loan was not for someone on a fixed income or a salary who was not flush in reserves to keep the payment up to date.
Now, you gotta realize that the borrowers did sign the paperwork representing themselves as capable of making the payments. There is a lot of fraud on all sides of the transactions. Locally, a Realtor scammed a lot of folks from Ca.
And there are the idiotic buildes who had assignment clauses in their contracts. This allowed "investors" to buy a contract on a property (typically condos) and to sell it someone else. Well, when the potential buyers of the contracts started to dry up, the initial pin heads with the contract would bail. This left the builders with too many unsold units…….and it keeps going on.
Luckily there are loan modification attorneys that can assist people in staying in their homes.