Home Foreclosures Top 1 Million
Americans are facing home foreclosures at a record pace. According to a survey by the Mortgage Bankers Association (MBA), nearly 3 million homeowners – 6.3 percent – were behind on their mortgages last year. More than 1 million borrowers, who represent 2 percent of all home loans, were in foreclosure. Â
The states hardest hit include California and Florida. Homeowners there accounted for 30 percent of the new foreclosures.Â
MBA’s survey, which covered 46 million loans on one-to-four-unit residential properties, represents more than 80 percent of all first-lien residential mortgage loans outstanding. A total of 35 percent of homeowners own their home free and clear.Â
A number of factors are behind the foreclosures sweeping the country, including declining home prices and delinquency rates on mortgage loans. As reported by Amy Hoak of MarketWatch, the delinquency rate on loans considered past due but not in foreclosure currently is at its highest level since 1985. Â
And no end appears to be in sight. An estimated 1.8 million subprime adjustable-rate mortgages (ARMs) are expected to reset to higher interest rates in 2008 and 2009. Because many of these loans are projected to reset in May and June, a number of them could be in default in the third quarter and in foreclosure by the next.
Adding to the potential that homeowners could end up defaulting in the future is an overall weak economy, rising fuel prices and declining home values.
Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage related investment losses.Â
