U.S. Mortgage Foreclosures Increase to All-Time High as Owners `Give Up'

[Purveyor]

March 6 (Bloomberg) -- U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments increased, the Mortgage Bankers Association said today.

New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier. Late payments rose to a 23-year high, the organization said in a report today.

``We're seeing people give up even before they get to the reset because they couldn't afford the home in the first place,'' said Jay Brinkmann, vice president of research and economics for the Washington-based trade group.

The worst housing slump in a quarter century is sending foreclosure rates higher and home prices tumbling as an oversupply of properties reduces demand. The Federal Reserve has slashed its benchmark rate twice this year in an attempt to avert the first recession since 2001 and financial companies have had at least $181 billion in asset writedowns and credit losses since the start of 2007, according to Bloomberg data.

``It comes down to an overstretching of buyers to get into homes they couldn't afford and an overextending of credit by lenders who were more willing to take risk,'' Brinkmann said.

---eoe---

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

[CountAllVotes]

1. It all boils down to the same old thing

GREED!

:dem:

[SpiralHawk]

9. "Greed is good." - Gordon Gecko giving voice to republicon family values

[El Pinko]

2. It's funny how people with a huge loan are called "owners"

Why are they not referred to as "homedebtors" until they own the house free and clear (except for the ternal obligation of property taxes)"

[Mountainman]

7. It means as apposed to renters. It use to be you had some ownership with a mortgage

when you had some equity.

[El Pinko]

11. That's because people used to put 20% down....

...and houses cost 3X median income, not 10X, as is the case in much of California...

[SoCalDem]

13. That one always bugs me too.. they are RENTING from the mortgagor

They may strip equity (if they have any) from the house, and use it, BUT they do not OWN anything until it's paid for..

HomeBUYER would be a more appropriate term, vs HomeOWNER or Renter..

If you OWE $400K on a house worth $250K, all you "own" are sleepless nights & bitten fingernails

[sarcasmo]

18. It's the same concept I use with those fifty thousand dollar Escalades.

They don't own a damn thing, the Bank does. I think Car debtor would be a wise choice of words.

[RB TexLa]

3. This has to be people coming off an intertest only period because the LIBOR is 2.708%

today and was 5.2% a year ago. Why would people be walking away from almost a 2.5% drop in their rate?

[dysfunctional press]

12. apparently, it depends on how their "adjustable rate" is calculated, and what it's tied to...

because i had wondered the same thing...:shrug:

[defendandprotect]

4. Why isn't Congress doing something to stop this --- ???

[RB TexLa]

5. You go to civil court to enforce a contract

[defendandprotect]

20. Yes, but there must be some way that Congress can help these people?

And, how will these communities benefit from having abandoned homes?

[walldude]

17. Too busy holding hearings on Roger Clemens. n/t

[dubyaD40web]

6. Ding Ding Ding!

"because they couldn't afford the home in the first place,"

[tjwash]

8. The bankers refer to them as "nina" loans

"No Income No Assets" Loans that should never have been approved in the first place, but were anyway.

[cliss]

10. Some shocking facts:

Note: this article refers to an all-time high foreclosures at the end of 2007.
GUESS what's happened to the foreclosure rate since December?
It's gone up, exponentially since then.
January will show new records.
February: even worse.
March of 2008 is supposed to be the worst month in terms of ARM's being reset.

I've read that in March, 1 out of every 10 home owners will be "under water" on their homes, meaning they will owe more than the house is worth. The odds are very strong these home owners will abandon their homes because there's no incentive to keep paying on a losing horse.

[ProgressiveFool]

14. Hmm... might be time to start scoping some prime locations to squat /nt

[sarcasmo]

19. Investing in a tent, cot and a sleeping bag might not be a bad idea.

[Johonny]

15. ?

So I suppose to believe all home owners will walk away from their house when the house assessed value dips below the paying price? Using this logic all cars would never go farther than the exit to the car dealer. I just bought my new car for 25 K. Oh it's now worth 20 % less once I drive it off the lot! Screw it, I don't want it anymore. Most home owners bought their house to live in, and as long as they can pay the taxes and mortgage the market price of the house has no meaning to them.

[Supersedeas]

16. nothing to see here -- feed them more primary poll #'s as the Election Year news blackout

continues