Home Foreclosure Wave Still Cresting

Posted on March 6th, 2008 by Jacky

There has been another shattering record number of foreclosures in the last quarter of 2007! In the last three months of 2007, home foreclosures hit an all-time high and an increase in the number of borrowers defaulting on their home mortgage loans.

Not only are the value of homes falling as a result of large home mortgage foreclosures, but also borrowers who are stuck with home mortgages that cost more than their house is worth, are simply walking away. There are still many home mortgages in the coming months that are due to “reset” or as I call it rise in mortgage payment.

The rate of failing home loans should climb through much of the year as national home values sink, said MBA chief economist Doug Duncan.

“You should expect to see, as long as house prices are declining, an increase in delinquencies and foreclosures,” he added.

Lower home values make it difficult for struggling homeowners to refinance and can create an incentive for them to simply walk away from their home and mortgage.

“We don’t expect to see the peak in delinquencies or foreclosures until mid to late 2008,” Duncan said.

Subprime mortgage borrowers were taking all of the heat for this mortgage mess, but all across the spectrum of borrowers, mortgage payments are falling behind. In the last three months of 2007, there were about 1 out of 20 delinquent payments from home loan borrowers, and about 1 out of 6 delinquent subprime borrowers.

As far as subprime mortgages go, many people think that this subprime lending business just started in the last year or so. Not true, there have been over ten years of subprime lending practices going on, but mostly targeting minorities. The mass appeal of the money that was made from over-charging home loan borrowers with subprime mortgages was to great of a payday for Wall Street and other investors. The end result of these fraudulent loan practices is what we are seeing today in the record breaking number of foreclosures. To stop foreclosure has become almost impossible. The hard working homeowner chasing the American Dream of Homeownership is catching all of the blame for this U.S. housing created by greed. Go figure!