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Sep
6
Does anyone else roll their eyes when they see these headlines about new records being made for the “number of mortgage loans that have entered the foreclosure process”?
Why roll eyes? Well, it’s true – it hasn’t been me per se that’s been warning of this. But I’ve been reading about others, particularly in NEOhio, who’ve been raising the red flags literally for years.
Which all exists as another reason (for another post for another day) for why people should be reading blogs: the people who write blogs address issues that take foerver to get published by the big box news outlets. And if you want a legislative solution to such a problem? Fahgeddabout it. Double, triple or quadruple the length of time the issue will be addressed legislatively.
Okay – I’m spiralling down on this one now. Just go read the MarketWatch story that says,
According to the group’s quarterly delinquency survey, a seasonally adjusted 0.65% of loans on one- to four-unit residential properties entered the foreclosure process during the period, the highest level in the survey’s 55-year history. In the first quarter, when the previous record was set, 0.58% of loans entered the process; a year ago, 0.43% entered the process.
What’s different about California, Florida, Nevada and Arizona? The article doesn’t provide any demographic specifics. I look to see what I can find but Bill – what’s a good resource for checking on that?
By Jill Miller Zimon at 10:27 am September 6th, 2007 in Politics
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From the MBA’s own press release:
“The percent of mortgages in Ohio that are 90 days or more past due or in foreclosure is still more than twice the national average… While Michigan’s problems continue to escalate, however, Ohio’s have shown signs of leveling off, albeit at a high level,” said Doug Duncan, MBA’s Chief Economist and Senior Vice President of Research and Business Development.
“What continues to drive the national numbers, however, is what is happening in the states of California, Florida, Nevada and Arizona. Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings. Thirty four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four,” Duncan said.
The press release has a number to call for journalists to request a free copy of the full report. (Others pay cash.)
More from the Mortgage Bankers Association press release:
Regarding the situation in Ohio, Michigan and Indiana, Duncan said:
* “While Ohio, Indiana and Michigan account for 8.7 percent of the mortgage loans in the country, those three states account for 19.9 percent of the nation’s loans in foreclosure and 15.0% of all of the foreclosures started in the country during the first quarter. Without these three states, the percent of loans in foreclosure in the US would be below the average over the last 10 years, 1.12 percent versus an average of 1.19 percent.”
* “The level of foreclosures and foreclosure starts for those three states exceed what occurred in Texas during the oil bust of the mid-1980s, and Ohio is the highest ever seen in the MBA survey for a large state.”
* “The problems in these three states extend across all loan types. For example the percent of subprime ARM loans seriously delinquent in Ohio, those loans 90 days or more past due or in foreclosure, is 19.9 percent, twice the national average of 10.1 percent. However, for prime fixed-rate loans the Ohio seriously delinquent rate of 1.9 percent is almost three times the national average.”
* All three states have suffered large declines in manufacturing employment. While we have seen some pickup in service sector employment, that employment is not often in the areas where job losses occurred and the wages are often lower. For example, while we have seen increases in employment in places like Cincinnati, Columbus, Ann Arbor, and Indianapolis, we have seen job losses in Detroit, Flint, Cleveland, Dayton and Muncie.
I’m no expert but when I see these states: California, Florida, Nevada and Arizona my first thought is – the high cost of real estate.
YMMV.
As for Michigan – I know what the problem is there. le sigh.