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More foreclosure risk, more pain
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THE ASSOCIATED PRESS
WASHINGTON -- The number of Americans at risk of foreclosure is rising, reflecting the U.S. economy's continued struggles.
The Mortgage Bankers Association said Monday that 8.44 percent of homeowners missed at least one mortgage payment in the April-June quarter. That figure, which is adjusted for seasonal factors, rose 0.12 percentage points from the January-March period.
In a normal market, the percentage of delinquent borrowers is about 1.1 percent, according to the trade group.
Delinquent mortgages have plummeted from a record high of more than 10 percent of residential mortgages a year ago. But the decline is due partly to delays in foreclosure filings that are backlogged in several state courts, including Florida, New Jersey, Illinois and New York.
The end of a state and federal investigation into faulty foreclosure paperwork will likely lead to increased foreclosures later this year.
Analysts say the increase is especially worrisome because it's due mainly to high unemployment, which tends to raise the number of missed payments and foreclosures over time. And once delayed foreclosures are restarted, the economy could suffer a hit.
"The current processing delays mean this will not happen quickly, underlining our view that both the housing market and the economy will remain weak for a few years," Capital Economics senior U.S. economist Paul Dales said.
The quarterly survey covers nearly 88 percent of primary residential mortgages totaling nearly 44 million loans.
Anthony Martin, principal of LV Default, said he's seen notices of default increase from about 80 a day to 150 a day in the last couple of months, even though July's notice-of-default count of 2,460 was down from 4,761 in the same month a year ago. It was the fourth straight month with fewer than 2,600 notices of default.
The numbers dipped because of legislation aimed at ensuring that banks have proper documentation to initiate foreclosure, Martin said. Most people know when they're behind on payments, and will plan accordingly, he said.
"We're definitely seeing more and more people opting to leave the property," said Martin, who tracks foreclosure data in Las Vegas and buys homes at trustee auctions. "We're discovering more vacant homes when we get there. Most people haven't made a payment for many months, so people are making a conscious decision to walk away."
The "strategic default" phenomenon has proliferated in Las Vegas, where some 80 percent of homeowners with a mortgage have negative equity in their homes.
Las Vegas Review-Journal reporter Hubble Smith contributed to this report.
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It's George Bush's fault // It's Sharron Angle's fault // It's Donald Ducks fault --------------- Nah, we all know who's fault this mess is " IT'S 100% OBAMA'S FAILED POLICIES FAULT " ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Harry Reid keeps saying "EVEN THOUGH I HAVE BEEN IN WASHINGTON FOR 29+ YEARS - YOU DON'T THINK I HAD ANYTHING TO DO WITH THIS, DO YOU ?????" ------------------------------- No Harry, we are all as stupid as you would like us to be -------------------
@Worldsgreatest-
So, based on your logic, anyone who finances a home that appreciates in value should see an increase in their mortgage, right?
"where some 80 percent of homeowners with a mortgage have negative equity in their homes."... This folks is the direct result from TARP and has absolutely nothing to do with a flaw in the free market system or the real value of your home. Why has congress not passed a budget for almost three years? The number one responsibility of congress is to take care of our nations business and that starts with a budget.
To those who are cheering the "strategic defaulters": many of the millions of unemployed workers are willing to do your job for half your pay. Should your employer dump your employment contract because his competition across the street can get workers for half price? All the upside down homeowners were happy when their home values jumped. Why weren't they giving away their equity back then... oh, wait. They were. Can you say HELOC?
How can there be so much unemployment? My god, someone has to be hired to call all these people 14 times a day to see why they are not paying their bill. "Peggy" is so busy these days, she can't stop to shave her legs. What is up with this. It takes as many to call on the late payers as it does to service in good times, doesn't it?
Stop the armored bus I want to get off...people are tired of this same old crap...
The trillions went to the wrong hole...again. I find it amazing that we still track the fact that Apple has more money in the bank than the U.S. Government. That we know the banks and corporation are sitting on trillions, a lot of it money that tax payers bailed them out with, and yet, election cycle's are going to call for more.
If the banks and wall street that caused this mortgage melt-down that got bailed out do not re-write every single mortgage down to the current value, along with the current low interest rates for the duration of the note and the IRS doesn't tax the difference, you won't have this problem. As long as the house across the street is going for a song, and people living in the exact same house or similar across the street know they are getting rooked, and they are, they are leaving. They would be idiots if they didn't. FICO, schmico. No one is playing this game. The system is broke. Fix it or shut up. Boring article, nothing new. Nothing surprising. People have lost faith in the monetary system, don't trust banks and could care less. Add to this the number of homes that will be destroyed during the hurricane season and the tornadoes. Something has go to give.