Last Friday, the Mortgage Bankers Association said that more than 4 million American homeowners with a mortgage… a record 9 percent … were either behind on their payments or in foreclosure at the end of June.
No longer can the rise in foreclosures be blamed on the sub-prime loan crisis. Now it seems that people with good credit who took out “exotic” loans with ballooning repayments are now joining the ranks of folks in foreclosure who had bad credit and no reason for getting a home loan.
The foreclosure crisis is now firmly entrenched in everyday America as nearly 1 out of every 10 homes is in default or some stage of foreclosure.
“The problem that policymakers and Wall Street once assured us was ‘contained’ to subprime mortgages has proven to be anything but,” Mike Larson, a real estate analyst with Weiss Research, said in a research note.
As the economy falters and home prices keep falling, concern is building about a second wave of mortgage defaults flooding the market through 2010.
As would be expected, most foreclosures are due to some hardship befalling the homeowner. Whether it be lost job, divorce, death or other health related problems, a drop in the amount of income for the homeowner is the primary reason people fall beyond on their mortgages and lose their homes.
Late last week the Labor Department said the nation’s unemployment rate shot up to a five-year high of 6.1 percent in August. this can only be seen as another catalyst in the rise in foreclosures.
Florida and California have so many mortgage defaults that experts feel that until those two states turn around, so goes the nation’s housing industry as a whole.
“We are unlikely to see a national turnaround until we see a turnaround in the two largest states,” with the most outstanding home loans, said Jay Brinkmann, the Mortgage Bankers Association’s chief economist.
With so many homeowners now in foreclosure and with there really being no end in sight for the next two years, what does that mean for those looking for a home and investors seeking to add real estate to their portfolios? It means opportunity!
It is very, very unfortunate that so many homeowners are in distress and hopefully some of the government programs can save some of these people from what is an almost certain demise, but in order for our economy to turn around and for the housing market to rebound, it requires new homebuyers and investors to seize the opportunities that exist and will continue to exist in the marketplace.
We rarely represent sellers and this information tells you why. Most sellers are hopelessly upside down and as we are seeing, many are already in foreclosure and their only way out is via a short sale.
On the other hand, as a buyer, you have tremendous opportunity to find the home you want and work to get the deal you want on your terms. As investors you can even find property that can cash flow.
European and international buyers are finding South Florida to be an absolute bargain due to the exchange rate.
If you are in the market for a home in the Fort Lauderdale real estate market, please give me a call or contact me via the form below. I would love to help you find the right home or investment and I would provide you with a free regression analysis on any property that you are interested in.
Related posts:
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate Update July 22, 2008
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate Update 1
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate Update for the Week Of June 16, 2008
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate Alert
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate | May 14, 2008 Update
- Fort Lauderdale Real Estate Mortgage Report & Mortgage Rate Update for the Week Of June 9, 2008
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