90% rise in May for home defaults

[donsu]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVVr0Jrm19OE&refer=home


U.S. Mortgage Foreclosure Filings Rise 90% in May


U.S. foreclosure filings surged 90 percent in May from a year earlier as more homeowners fell behind on their monthly mortgage payments, RealtyTrac Inc. said.

There were 176,137 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said in a report today. The median price for a U.S. home slid 1.8 percent the first three months of 2007 as the housing slump entered its second year, according to the National Association of Realtors. The filings rose 19 percent from April.

-snip-

In the report, 43 regions reported an increase in foreclosure filings from a year ago, including the District of Columbia, and eight states had a decline.
-snip-
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not good

[phantom power]

1. May 2007 was a predicted turning point.

A large batch of ARM loans began to re-set at high interest rates, starting May, and will continue for several months.

[havocmom]

2. Ownership Society = ultra rich owning the society

the working people and most vulnerable are just SOL

Feudal America just around the corner.

[Warpy]

3. Not surprising, either.

Over the last couple of years, subprimes have been a scam. People who had income so low it wouldn't afford them a trailer in Mississippi were approved for houses over $500,000. This did a few things: it took a house off a real estate company/bank's books and cut their costs; it kept the comps up to kid people that the houses out there were still worth that; it deflated the number of houses on the market; and it held those houses off the market for as long as the low income people who had heard only "getting a house for free" struggled to make a few mortgage payments. The foreclosure would take at least a couple more months, and by that time, other poor folks had been approved for other gargantuan loans to take other houses off the market.

The crash is worse than you think, especially in areas that actually saw a speculative bubble; it's also worse in areas like mine that were overbuilt to satisfy the speculative market. The subprime crash will be worse than anyone suspects.

I would not want to be in the parts of California where a mortgage runs two to three times what the rent on an equivalent property would be. I would not want to be holding California property I'd bought within the last five years. I would really not want to be people who sunk every dime into spec housing that is sitting empty while they wait to make a buck on it.

[JackintheGreen]

4. Lordy! don't tell me these things

I'm closing on my first house in two weeks, and I know my monthly expenses are going to go up, and it worries me so.

Of course, I got a 30 year fixed and live and die by the (income x 2.5) = (total home cost) and am only mortgaging 2x my annual income, etc, etc.

But it still worries me so because so many of these bastards are, well, bastards.

[vi5]

5. From my experiences with family and friends...

My sympathy in a lot of these cases isn't as much as maybe it could be. I know people of limited means who waited and saved until they got together enough money to buy a house, when they could have easily went with a sub-prime sooner. It may have taken them 2-3 years, but they had the sense to know sub-prime was a bad deal

I also know people who were impatient to buy a house and very well should have known better than to fall for the sub-prime scam, either due to previous life experiences and/or being very well educated people. But they simply had to have their house and they had to have it now to keep up with the joneses and their appearances.

Without fail it's the latter being foreclosed on and the former are having no problem maintaining because they didn't overextend themselves. I know it's more convenient to see this as a matter of the haves and the have nots, but the people I know who grew up with or were of more modest means understood the way the system was rigged more than the people who never wanted for anything growing up and never were forced to learn the way the system is rigged for the very wealthy. They bought bigger houses than they could afford and they fell for the sub-prime scam. It's not that I don't feel bad for them but it's also not a black and white purely sympathetic case of "the man" sticking it to the working class.

[unpossibles]

6. there is some truth there

I am sympathetic - someone on Monday told me of a mortgage payment going from $800 to $1800 a month! - but with some limitations. I do think that the brokers took advantage of people the same way credit card companies do, and that sucks. A lot of folks were lead by the companies who profit from it, that real estate was a no-lose investment and fell for it.

My wife and I both come from a long line of skinflints, so the formula for our house is closer to 1.5x one of our incomes, at a fixed rate, and it needs a little TLC, where we have some friends who went way overboard on a huge McMansion.

[TahitiNut]

7. I gotta wonder how many of those loans were underwritten by the GI Bill.

I'm guessing the default rate may not be adequately funded. :scared:

[ayeshahaqqiqa]

8. I've noticed something strange today

This morning, I called the July customers who wish to have an annual termite inspection. For the first time, long time customers have said they won't renew because they can't afford to. And a couple of folks said that they would have the inspections when they were able to unload their property. And realize we haven't raised our rates--the reluctance to pay out money for a termite inspection, which many see as not necessary, shows that the monetary noose is tightening around the necks of a lot of folks around here.

[donsu]

9. interesting - thanks

nt