Saturday, December 06, 2008
"First" of the Day: Home foreclosures
The Mortgage Bankers Association said its latest survey, released Friday, showed that 10% of mortgages on one- to four-family homes were at least a month overdue or in the foreclosure process in the third quarter. That is up from 9.2% three months earlier and 7.3% a year ago. The current level is the highest since the trade group began such surveys four decades ago. —James R. Hagerty and Deborah Solomon reporting in "Rising Number of Homeowners in Trouble"
I had scarcely finished my little post explaining the further convulsions to be expected in the home real estate market when the Mortgage Bankers Association released its findings for July through September.
Aside from finding that 10% of all mortgages were either overdue by at least a month or in foreclosure, the report revealed two more "firsts" hidden in that statistic.
- For loans 90 days or more past due but not yet in foreclosure, the rate "jumped by 45 basis points, the highest increase in this category ever recorded in the MBA survey."
- "the percentage of loans in foreclosure, 2.97 percent, hit a new record in the period from July to September," according to Charles Heller.
Let's see what the percent of foreclosures comes to in absolute numbers. Two-thirds of the 111.7 million occupied housing units have a mortgage, or 74.5 million units. If 2.97% of them are in foreclosure, that translates to 2.2 million homes.
Think of the number of homes lost in Hurricane Katrina—estimated at 275,000 (said to be 10 times the loss in any previous natural disaster)—and then consider the number of homes lost in the next-to-last quarter of the Bush administration—a most unnatural disaster. Do you think FEMA will help?