U.S. Mortgage Foreclosures Rise as Owners `Give Up'

[marmar]

from Bloomberg:



U.S. Mortgage Foreclosures Rise as Owners `Give Up' (Update3)

By Kathleen M. Howley

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 Bush administration is urging lenders to avert foreclosures by modifying mortgage terms amid the worst housing slump in a quarter century. The Federal Reserve has slashed its benchmark interest rate twice this year to try to avert the first recession since 2001. The central bank yesterday said the net worth of U.S. households decreased by $532.9 billion during the fourth quarter as home values fell.

The share of all home loans with payments more than 30 days late, both prime and fixed-rate loans, rose to a seasonally adjusted 5.82 percent, the highest since 1985, the bankers' group said in today's report.

Buyers `Overstretched'

About 40 percent of all foreclosures are homeowners with prime or subprime loans who couldn't make their payments before the reset, Brinkmann estimated in an interview. Another 23 percent are borrowers who received some form of loan modification, typically a freezing or a reduction of their rate, and then default, he said

Forty-two percent of new foreclosures in the fourth quarter were people with adjustable-rate subprime mortgages, given to borrowers with limited or tainted credit records, according to the report. Those types of loans accounted for about 7 percent of all mortgages, the report said. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aPb48hRS1hJQ&refer=home

[louis-t]

1. Wasn't it boosh who told us to "spend, spend, spend"?

hannity and rush, too.

[Deja Q]

2. msn.com has a few articles saying how credit card debt is a myth

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/TheBigLieAboutCreditCardDebt.aspx

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/ManageDebtDyn.aspx?cp-documentid=5044315