« | »

48% Of Subprime Mortgages In Trouble

From a tearful Associated Press:

Mortgage woes break records again in 4Q

By J.W. Elphinstone, AP Real Estate Writer

NEW YORK – A stunning 48 percent of the nation’s homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure, and that’s not the worst of it, new data Thursday showed.

The reckless lending practices in states like Florida, California and Nevada that were the epicenter of the housing crisis are no longer driving up the nation’s delinquency rate. Instead, the foreclosure crisis now is being fueled by a spike in defaults in states like Louisiana, New York, Georgia and Texas, where the economies are rapidly deteriorating and thousands are losing their jobs.

A record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the Mortgage Bankers Association reported. That’s up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007…

On Thursday, the Labor Department said new unemployment claims last week totaled 639,000, lower than expected, but still at elevated levels…

Even if these mortgage figures are accurate, which we doubt, they do make a lot of sense.

Why should anyone pay their mortgage on time and in full, when everyone in our political system is promising they will be able to get their payment rate lowered or even their entire loan ‘forgiven.’

This article was posted by Steve on Thursday, March 5th, 2009. Comments are currently closed.

19 Responses to “48% Of Subprime Mortgages In Trouble”

  1. MinnesotaRush says:

    “Mortgage woes break records again in 4Q”

    – Whalaa .. notice the BAD news first ….

    “NEW YORK -A stunning 48 percent of the nation’s homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure, and that’s not the worst of it, new data Thursday showed.”

    – to the casual reader .. 48% .. 48% .. the sky is falling .. Then, later ….

    “record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the Mortgage Bankers Association reported”.

    But they do hone in on the root of the problem with precision accuracy (as usual – NOT) by reporting ….

    “Prime and subprime fixed-rate loans saw sharp increases in the fourth quarter, a sign that the problem is now the economy.”

    So now it’s the economy, stupid. Bet Frank, Dodd, and the folks over at our favorite GSE’s are relieved.

  2. Colonel1961 says:

    Well, that is shocking. Never saw that coming…

  3. crosspatch says:

    I was listening to someone on Bloomberg yesterday and he mentioned that the new mortgage bailout only addresses a market segment that isn’t a problem. The bailout only allows people to refinance at better terms if they have a job, good credit score, and verifiable income. He said that those people aren’t the problem. 85% of the mortgages that are in foreclosure are from people whose income can not be verified or who are not working.

    Also, I have a problem with the reporting of the numbers in that article. What they are basically saying is that 12 percent of mortgages are at least 30 days delinquent, up from 10 percent. That is a typical method of casting a very wide net in order to capture a larger number. The notion that somehow 30 days delinquent is the same as in foreclosure is nuts. That isn’t even “default”. Lumping everyone 30, 60, 90, default, and foreclosure all in one number inflates the number and makes things look worse than they really are.

    Look at these numbers. Foreclosures were actually DOWN in January from December (but higher than January of last year). It takes a long time to get from 30-days delinquent to foreclosure.

    The numbers as of January show that 1 in 466 households is in foreclosure. That is about 0.2% of all mortgages. In other words, 99.8% of households are NOT in foreclosure.

    So they are grasping at anything they can find to get numbers in the double-digits but only 1/5 of 1% of homes are actually in foreclosure nationally.

    • 1sttofight says:

      Then I guess I am in foreclosure, my house payment was due on the 1st which was a sunday and I did not make it until the 2nd (monday) so I guess I am in imment foreclosure.
      I demand immediate relief from the federal goverment.

      I think they should pay off my mortgage in full otherwise I may get the vapors.

    • crosspatch says:

      And another thing to note is how regional the numbers are. Half the states are unchanged or improved from a year ago. 35 states are improved from last month. The five states with the highest percentage of households in foreclosure are Oregon, Florida, Arizona, California, and Nevada. These are states that had a tremendous “housing bubble” over the past 10 years. The five states with the lowest percentage in foreclosure are Vermont, Nebraska, West Virginia, South Dakota and Montana. I would be willing to bet that housing has homes have held their value pretty well in those states. A quick look at zip code 59102 shows housing values today the same as they were in January 07 and substantially higher than they were in January 05. They have held their value quite well. People in Billings are not “under water” with their mortgages and the banks there are not in trouble unless they invested heavily in real estate in Florida, California, Arizona, Nevada and Oregon or got into mortgage derivatives based on mortgages in those states.

      This is a very regional problem. The trouble is the big banks pumped up the markets in the “bubble” states and took a hard fall when that ponzi scheme collapsed.

    • 1sttofight says:

      Your mortgage is not my problem.

  4. proreason says:

    “And another thing to note is how regional the numbers are”

    yeh, democrat regions.

    The mortgage bailout is just another re-distribution scheme. It’s a payoff scheme for deadbeats who were first given the mortgages and now are being given the houses.

    When will it stop?

    • 1sttofight says:


      MEET ME IN DC 7/4

    • canary says:

      yeah good point. I just heard a day or two ago, the national average was 1 out of 5 homes. That they were going to let people pay 500 dollars a month, for 3 monthes, and then look at each loan on an “individual basis”. We are a red state and are getting about .15 %. We are creating a task force to keep an eye on every penny.

  5. And with ownership of nearly all banks by government soon, we will likely see more of the rotten loans made vs the ones that wind up only 30 days out before getting caught up.

    • crosspatch says:

      “And with ownership of nearly all banks by government soon …”

      Actually, there is some pushback on that front. BofA, for example, has been talking about giving back the money they got from the government because Congress then apparently wants to tell the bank how to do business. BofA says that the restrictions Congress wants to saddle them with would make them less competitive in the marketplace against banks that didn’t take the money. So they are saying they are going to pay it down as fast as they possibly can.

  6. proreason says:

    Bio of the “man” most responsible for the financial crisis, Drooling Barney Franks.

    Even readers of this site may be surprised.


    • heykev says:

      Good article Pro. It’s just a shame he’s not standing trail for his crimes. If Holder wasn’t such a coward, maybe he’d put him on trial.

  7. GetBackJack says:

    To quote Gomer Pyle …. Surprise, Surprise, Surprise!

  8. wardmama4 says:

    Wait, I thought that all these subprime loans were bundled into packages and then sold – which is why so many banks are in trouble – since they can’t tell which is which and bought garbage along with good. So how can the AP now know that the exact percentage that are in trouble?

    Sounds a bit like The One ™ logic – if it scares people and gets them to support my next Generational Theft Act – it’s good.

  9. crosspatch says:

    “So how can the AP now know that the exact percentage that are in trouble”

    Because someone actually “services” the mortgage … meaning someone collects the payments, sends out past-due notices, does the foreclosure, etc. So the service companies know how many sub-prime loans they are handling and they know how many are past due.

  10. David says:

    My wife and I looked at a foreclosed house here in Oregon. The previous owner wrote on the living room wall some comments about how “the f**ing war” affected their ability to pay their mortgage or afford to finish their remodel. Then they proceeded to take a sawzall to the load bearing walls and cut a slice in each and every stud. They also removed the tarp from the roof covering their unfinished sky light hole allowing rain to destroy the master bedroom and bath. Now there isn’t a bank in the area that would give a loan for it even at less then half its assessed value because of the damage. The rotting house sits empty for half a year now driving down the worth of the neighborhood. Had it been a year later this person would have had Obama to bail him out. I hate to judge so many based on the actions of one idiot but no one like this should get bailed out.
    I also resent liberals painting the subprime buyers as low income, disadvantaged buyers. My wife and I fit that description to a “T” but we will be getting a conventional loan (a small one) at a great rate because we have been exceedingly careful with our credit. There is no reason to buy at subprime rates, just wait a few years and build your credit back up. To me, subprime means irresponsible.

  11. crosspatch says:

    Something I just noticed … it looks like the “everyone making over $250K is going to bail everyone else out” isn’t exactly true. It is individuals making over 200K and couples making over 250K. Now that is probably every single working couple over 30 years old in Silicon Valley. Now imagine … you live in a place where a 40 year old ranch style housing development slab home costs a million dollars. You and your wife make about $150K which is just enough to buy a home IF you had some equity from your last one you could use as a down payment … now Obama wants to take away part of their mortgage interest deduction and their charitable deductions. Now they can’t afford to make their payments.

    Obama is going to turn us into a nation of renters.

« Front Page | To Top
« | »