Foreclosures, Late Payments Set Records

Bank Association Says More Homeowners Are Falling Behind On Mortgage Payments

(AP)  Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.

The latest snapshot of the mortgage market, released Thursday, showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.

The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.

The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.

Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

Jay Brinkmann, the association's vice president of research and economics, told The Associated Press that the slump in house prices was the biggest factor for rising foreclosures and late payments.

With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up" in the months ahead, he said.

Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.

The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.

The association's survey covers just over 45 million home loans.

More problems also cropped up with loans to more creditworthy borrowers.

The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payment rose to 3.71 percent, compared with 3.24 percent.

The numbers were higher for prime borrowers with adjustable rate mortgages. The proportion of those loans falling into foreclosures jumped to 1.55 percent from 1.06 percent. The delinquency rate rose to 6.78 percent, compared with 5.51 percent.

"The number one problem is the drop in home prices," Brinkmann said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when they run into trouble - a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."


California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply, Brinkmann said.

After a five-year boom, the housing market fell into a deep slump two years ago. That dragged down sales, and prices with it. As the value of homes plummeted, many newer homeowners found themselves owing more on their mortgages than their homes were worth.

Homeowners with adjustable-rate mortgages were clobbered when their initially low rates reset to much higher ones. That made it difficult, if not impossible, to keep up with monthly mortgage payments.

As foreclosures and late payments climbed, financial companies took multibillion losses when their investments in mortgage-backed securities soured. A credit crisis erupted and spread, crimping other types of financing. The fallout plunged Wall Street in turmoil, disrupting the normal functioning of markets.

All those troubles have pushed the economy to the brink of a recession, if the country isn't already in one. Consumers and business have tightened their spending. Employers have cut more than a quarter-million jobs in the first four months of this year.

To bolster the economy, the Federal Reserve made aggressive interest rate cuts. That has helped homeowners facing rate resets on their adjustable-rate mortgages. But with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal yet that the central bank's rate-cutting campaign started that started in September is coming to an end.

The Bush administration has taken steps to help distressed homeowners. It has urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes.

A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it.

The government would back as much as $300 billion in new loans to help certain borrowers refinance into cheaper, fixed-rate loans. Mortgage holders would have to agree to take a substantial loss on the existing loans; borrowers would have to show they could afford the new mortgage and share future proceeds with the government.

The House passed its version last month. Senate leaders say they want to vote by July.

Groups representing builders and real estate agents want incentives, such as a $7,500 temporary tax credit for first-time home buyers, to support the market.

"Policies that stimulate home purchases in the immediate future can pay huge dividends and a temporary home buyer tax credit provides the most bang for the buck," Joe Robson, a home builder from Tulsa, Okla., said in prepared remarks at a House hearing.

Live within your means and don''t try to impress someone else. This is what happens to those that have the attitude that "I want it all and I want it now". You made your bed, now lay in it.

[randynason]

"The economy is strong and robust." So sayeth the Dic''taterhead George W. Uh-huh-

[formrusmcsgt]

Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising....

As dubya claims it''s nothing but a "slowdown", one shudders to think what would be happening in a situation that he''d actually call a recession, eh?

[popstom1]

Well now that PB got there boy in F-K obama

[middleman8]

Everyone in this run up to election are pretty well even, so this would be a perfect time to start a third political party and get rid of the two party dictatorship.

[lemonskink]

Those stimulus checks of your own money thrown back in your face helped a lot, didn''t it? Bush and his minions will be living the high life, and their future generations will be born with a golden spoon in their mouths, while the hard working, slaving average American''s child will be born with a minimum of 30,000 dollars indebted. At birth. When Bush is back in Crawford with his feet propped up on the couch as he said it, the coast will be clear for him, Cheney, and all of his other associates who worked together to steal from America to invest those spoils. Many of them will end up on the boards of huge companies, if only as figure heads. But, you''ve been robbed by them, so that they may groom other Bushes for future positions in the game to rob America.

[stevex47]

"Don''''t worry America. Those tax cuts Bush gave to the rich will trickle down eventually right?"

Ha, rick, yes it will trickle down to the saudi''s and other muslims and friends. You know the ones, the ones that Boosh kisses their hands and feet.

[singingrick]

Don''t worry America. Those tax cuts Bush gave to the rich will trickle down eventually right?

[mcvet]

Most of us liked your old name, "Republican".


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Posted by vnveteran72 at 07:08 PM : Jun 05, 2008

Desperation has many forms huh??? ROFLMAO

[mcvet]

When will you convince Hillary to run as an independent?



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Posted by hypnotoad72 at 06:47 PM : Jun 05, 2008
+ report abuse

Oh don''t hold your breath swastika hugger!! ROFLMAO HIllary KNOWS where she is and what she has to do... better look out though. What''s coming at the Fascist is NOT going to be pretty... NOT AT ALL!! Sieg Heil and Bye bye!!

[mcvet]

We are united against your usurpation of the will of Democratic voters. There will be no unity in the Democratic party until the votes and voices of the 18 million democrats in ALL 50 states are listened to.

We will not back down, be bullied or pandered into supporting a disastrous candidate like Barack Obama. He has been tainted by too many real scandals. He will lose in a landslide loss in all 50 states.

We will not vote for Barack Obama for president.

Puma Democrat



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Posted by TruUSA at 05:15 PM : Jun 05, 2008
+ report abuse

YOU aren''t going to matter anyway... people like you who are in something for the glory and NOT the meaning is NEVER important. SO don''t let the door hit you in the butt!! YES WE CAN!! YES WE CAN!! YES WE CAN!! Obama 08

[mcvet]

It has been said, that the mortgage refinancing craze was a movement to get extra bucks in one''''s hand. In the frenzy, too many people failed to read the contract they or signing or worse did not understand what they were signing. As usual, the fault always lies elsewhere.


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Posted by BajaJohn1 at 08:30 PM : Jun 05, 2008
+ report abuse

YOU left out some MAJOR details there swastika hugger!! We should ALL extend a very special thanks to Senator McCain''s Financial Planner since HE is the one major Lobbiest most responsible for the removal of ALL the regulations which made these LOANS and the preditory lending possible. YOU see BEFORE the honorable Phil Gramn and his big buck cliants such lending was AGAINST the LAW. LENDERS had to take a person EARNINGS and were NOT allowed to lend that person or persons money unless their earnings would withstand the payments... SO let''s ALL give a very big SIEG HEIL to that very powerful Lobbiest and his GOP pals!! SIEG HEIL BUSH!!

[mcv57]

I am moving in an Apartment. Condo and House rentals are trying to past the buck. Don''t you agree?

[vnveteran72]

So, that''''''''s 6 red states and 4 blue. And the liberal state of Vermont had the LOWEST number of foreclosures.

Posted by roger_inkart at 03:23 PM : Jun 05, 2008
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That''''s because Liberals have the money to pay their mortgages instead of spending it on NASCAR Tickets or giving it to their MegaChurch Pastors.


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Posted by FloydZeppl at 03:40 PM : Jun 05, 2008
+ report abuse

LOL.....Corn Bumpkin 500,.....

[vnveteran72]

We will not vote for Barack Obama for president.

Puma Democrat



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Posted by TruUSA at 05:15 PM : Jun 05, 2008
+ report abuse

Most of us liked your old name, "Republican".

[floydzeppl]

another one...doom...dooooom.......
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http://www.msnbc.msn.com/id/24988315/


Equity in Americans%u2019 homes falls to historic low

Drops 46.2 percent in first quarter %u2014 level not seen since end of WWII

updated 1:56 p.m. ET, Thurs., June. 5, 2008

NEW YORK - The equity Americans have in their most important asset %u2014 their homes %u2014 has dropped to its lowest level since the end of World War II.

[hypnotoad72]

I am a member of the new Puma PAC, People United Means Action.

Posted by TruUSA
-----

When will you convince Hillary to run as an independent?

[feelfree4u]

Re: "We will not vote for Barack Obama for president."

"Puma Democrat"

Posted by TruUSA

Who cares, and what does that have to do with this article?

[feelfree4u]

Even former Tonight Show sidekick Ed McMahon has defaulted on his mortgage, after falling more than a half-million dollars behind in payments.

And the Alan Greedscam/get-rich-quick created housing market collapse is far from over.

[skyk-2009]

Bad business deals and poor fiscal management cuts across political lines . . . but it is still an individual responsibility that effects only a small percentage of the population. It is not the government''''s responsibility to bail out people that have made dumb choices and bad decisions.


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Posted by rplat at 03:46 PM : Jun 05, 2008
+ report abuse

It''s the GOVERNMENTS responsibility to maintain regulations that have through the test of time proven NECESSARY on lending institutions. Regulations the Republican''s under the insistence of Phil Gramn removed. It''s also, the responisbility of Government to prevent preditors from praying on people with false claims and false promises, also, regulations REMOVED by the Republican''s. The Republican Party became nothing but Lap Dogs for Corporations and let the people of this nation down. THATS a fact and the TRUTH that can not be ignored.