Posted by: VotingFemale | October 15, 2009

Obama Failure Indicator – Unemployment fueled Mortgage Defaulting

  • samiam60 // October 15, 2009 at 7:23 am

    Foreclosures rise 5 percent from summer to fall
    Foreclosures keep soaring as unemployment remains main cause of housing woes

    WASHINGTON (AP) — The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.

    The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.

    Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate — now at a 26-year high of 9.8 percent — isn’t expected to peak until the middle of next year.

    Mortgage companies sometimes allow unemployed homeowners to defer three to six months of payments while they are looking for a job. But there’s little else they can do.

    “The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we’d all like” said Rick Sharga, RealtyTrac’s senior vice president for marketing.

    Last week, the Obama administration hailed a milestone in its mortgage relief effort, reporting that 500,000 homeowners have received help since the program was launched in March. But new defaults are still exceeding the number of borrowers getting help.

    Mortgage companies have slowed down the pace of foreclosures as they evaluate whether borrowers qualify for the administration’s program. Analysts, however, forecast that many of those homeowners won’t qualify, and foresee a new wave of foreclosed properties hitting the market next year. That’s likely to further depress home prices.

    Some homeowners are in such a massive financial hole that it’s hard to design a modification that will actually provide lower payments. And some have avoided paying their monthly bills for a long time.

    Carlos Estrada, 57, of Tulare, Calif., for example, hasn’t made a mortgage payment since February 2008. The construction jobs that kept him working more than 40 hours a week during the housing boom have all but vanished.

    Earlier this year, he turned down a modification offer from Bank of America because it would have incorporated his unpaid balance and raised his monthly bill. But a bank spokeswoman said Wednesday that Estrada’s foreclosure sale had been postponed until late next month while the bank reviews whether he can qualify for help.

    “I’m still here waiting for them to help me resolve this situation,” Estrada said in Spanish.

    According to the RealtyTrac report, there were nearly 344,000 foreclosure-related filings last month, down 4 percent from a month earlier but still the third-highest month since the report started in early 2005.

    It was the seventh-straight month in which more than 300,000 households receiving a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes.

    Banks repossessed nearly 88,000 homes in September, up from about 76,000 a month earlier.

    On a state-by-state basis, Nevada had the nation’s highest foreclosure rate in the July-September quarter. Arizona was No. 2, followed by California, Florida and Idaho. Rounding out the top 10 were Utah, Georgia, Michigan, Colorado and Illinois.

    AP Real Estate Writer Alex Veiga contributed to this report from Los Angeles.


Additional Reading…

The Irish Economy » Blog Archive » NAMA Business Plan Default Rate

4 hours ago by Karl Whelan
Over a five year period in the early 1990s, one UK bank experienced a default rate of less than 10% on its whole book. Given the concentrated nature of the prospective NAMA portfolio and the risk of a prolonged recession, So now the breakeven point has suddenly shifted 10 billion to 60.52 billion. 47->60.62 is a 29% increase. Eoin the banker and karl deeter the mortgage broker, any comments on how 10% suddenly becomes 29% as soon as the Greens agree to the plan?
The Irish Economy –

The Next Big Bailout? FHA Facing ‘Cataclysmic’ Default Rates

13 Oct 2009 by Yahoo
FHA Facing ‘Cataclysmic’ Default Rates 13/10/2009. Given the choice between “complete collapse” and increased government involvement in the housing market, Whitney Tilson, manager of T2 Partners, is glad policymakers opted for the latter in 2008. But there is going to be a heavy price to pay for the U.S. government becoming the nation’s mortgage broker, says Tilson, co-author of More Mortgage Meltdown.
LEAP/Europe 2020 –

How Mortgage Refinancing Helps Homeowners? | Home Mortgage

15 hours ago by us
That is because mortgage interest rates are currently near all time lows. Mortgage rates are around 5.19% for the average 30 year home loan. That is very much lower than the rate many homeowners currently have. It is nearly half of what the This plan is aimed at the millions of homeowners who are facing foreclosure or losing their home to mortgage default. Currently, with the bad housing market, and the worse economy, a lot of people are facing losing their home.
Home Mortgage –

Will Comercial defaults have as great of an impact as subprime?

12 Oct 2009 by Monedog
US Commercial Mortgage Defaults May Rise to 17-Year High June 9 (Bloomberg) — The default rate on commercial mortgages held by US banks may rise to the highest in 17 years in the fourth quarter as debt for refinancing remains scarce
BiggerPockets Forums –

The Mortgage Lender Implode-O-Meter News Pick-ups: US Corporate

6 Oct 2009
US Corporate Default Rate Falls for First Time This Year. Mortgages Blog Directory · Finance blogs · Mortgage Lender Implodes and News · Finance Blogs – Blog Catalog Blog Directory.
IEHI Feed: The Mortgage Lender Implode-o-Meter –
[ More results from IEHI Feed: The Mortgage Lender Implode-o-Meter ]

True Economics: Economics 13/10/2009: Nama politicised

13 Oct 2009 by Dr. Constantin Gurdgiev
The problem here is that if you subsidise my neighbour, I will face a choice: (a) continue paying my mortgage at increased rates (someone will have to provide the ‘subsidy’) or (b) default and get subsidised too.
True Economics –

There is bad credit and then there is baaaaad credit | Mortgage

14 Oct 2009 by admin
(Interest rates are extremely low right now and chances are that in 5 years time if rates increase at a greater rate than your salary, you will not be able to afford the same size mortgage you can afford today.) They after all want to feel secure that if you default on your payments they can easily recoup their money. Remember that bad credit is not permanent, but it is up to you to take the first steps to recovery and a new home can be in your future.
Mortgage Broker|Mortgage Rate Montreal –
[ More results from Mortgage Broker|Mortgage Rate Montreal ]

Influencing Markets: 6 Markets, Housing vs Stocks, Dollar, Global

12 Oct 2009 by admin
Global Junk Default Rate Hits 12%, Nears Expected Peak – Moody’s says global speculative-grade default rate will rise to a peak of 12.5% in the fourth quarter of this year and then decline sharply to 4.5% a year from now.
Mortgage News Clips –

DvD Insights – Reduced Form Macro Factor and Roll Rate Models of

5 Oct 2009 by Sean Klein and Donald R. van Deventer
This blog post discusses two different techniques for mortgage default modeling: reduced form macro factor modeling and roll rate modeling. We then apply both techniques to a dataset of mortgage defaults in the United States. Daily Risk News Feed –

Wonk Room » Is The Administration’s Mortgage Modification Program 10 Oct 2009 by Pat G.
October 11th, 2009 at 6:23 pm. Ditech Mortgage Says: Another factor to consider in the mortgage modification issue is the estimated 50% to 70% re-default rate after loans are modified. October 12th, 2009 at 2:18 pm
Wonk Room –



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