Is it really that surprising that in this down economy everyone is hurting a little? Well, definitely in this case that has hit more than just the sub-prime market. It has affected those up on the hill which in most cases hurts us the little guys on Main St. When those thought that it was only the ARM (Adjustable Rate Mortgages) that were going to blow up they didn’t take into account the fact that the economy coming in some cases to almost a screeching hault that has burnt the bottom line for everyone. Those that were sub-prime or risk borrowers have not become un-lendable and those with great credit have almost become un-bankable. As much as this is a true part of our current real estate market we feel that while homes are like commodities they will never hit zero but that this market is not near its end and will be here to say. In some cases homes have dropped 50% or more and with home values rising about 4% to 6% a year (usually 2% in front of inflation) is is going to be a long time before homes reach 100% of their current value just to make it where is was once upon a market.
“WASHINGTON — A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.
At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record-high for the ninth straight quarter.
The Mortgage Bankers Association’s report Thursday suggests the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.
About 4 million homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if a quarter of those borrowers are able to stay in their homes, “there’s a lot of potential inventory coming into the market next year,” said Jay Brinkmann, chief economist with the Mortgage Bankers Association.”
Read More: http://www.ktla.com/…foreclosures-prime-loans,0,2831211.story
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