We all know that things have been less than ideal for homeowners over the past year, and we got a little clearer picture yesterday of just how bad things have become. According to a new report, 12% of all homeowners in the country were at least one month behind on their mortgage payments, or already in foreclosure at the end of 2008.The situation is even worse for subprime, adjust-rate mortgage holders. These loans have been blamed as a major reason why the credit market has reached the point where it is now, and according to this report an amazing 48% of these mortgages have either fallen behind or have entered foreclosure proceedings.
With 12% of homeowners now in trouble with their mortgages, that represents a total of 5.4 million American homeowners. The numbers are now running 20% higher than they were at the end of the third quarter when 10% of the nation's homeowners were in trouble.
While the subprime lending practices were definitely the initial causes for the mortgage situation we are facing, we are now looking at a situation where fixed-rate mortgage holders are also having troubles, clearly indicating that unemployment has become a major factor in the foreclosure mess.
We did get a bit of good news that jobless claims were lower than expected last week, at 639,000, but still higher than usual. While unemployment remains at these levels it is going to be tough for homeowners to keep current on mortgage payments, no matter what sort of mortgages they have on their homes.
Areas of the country that have seen a rise in foreclosures lately are Louisiana, New York, Georgia and Texas. It does not come as a surprise that these states are also witnessing a sharp rise in unemployment.
What is the situation in your area? What trends are you seeing in unemployment as well as foreclosures in your communities?
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Reader Comments (Page 1 of 1)
3-06-2009 @ 10:23AM
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5-07-2009 @ 2:23AM
vcao said...
While the subprime lending practices were definitely the initial causes for the mortgage situation we are facing, It does not come as a surprise that these states are also witnessing a sharp rise in unemployment.