Foreclosure Data Hits New Record High
Mortgage foreclosure data released today puts defaults on home loans at a new record high. But even worse numbers may be on the horizon.
“The Mortgage Bankers Association reported Thursday that the number of loans past due or in foreclosure jumped to 7.9 percent, from 7.3 percent at the end of September and 6.1 percent in December 2006,” reports the New York Times. “Before the third quarter, the rate had never risen past 7 percent since the survey began in 1979.”
Douglas Duncan, the group’s chief economist, says it doesn’t expect the problem to reach its peak until mid-2008, as monthly payments continue to increase exponentially on the adjustable-rate subprime mortgages that many homeowners with minimal qualifications obtained in recent years. There also appears to have been an unprecedented amount of mortgage fraud contributing to the rapid rise in foreclosures, as discussed in earlier ABAJournal.com posts.
The latest figures are likely to provide further support for ongoing calls by some legislators, government officials and housing advocates for lenders to reformulate mortgages at lower, fixed-rate interest and even forgive some of the principal balance, in order to help lessen the tidal wave of foreclosures.
