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What rebound? Foreclosures rise as jobs and income drop

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posted on Aug, 21 2009 @ 09:22 AM

WASHINGTON — Delinquency and foreclosure rates for U.S. mortgages continued to rise in the second quarter, with loans to the most qualified borrowers going bust at an unnerving clip, especially in hard-hit states such as Florida and California.

The numbers reported Thursday by the Mortgage Bankers Association show clearly that rising job losses are worsening the nation's housing troubles and threaten the Obama administration's efforts to keep owners from losing their homes.

The quarterly National Delinquency Survey showed that almost one in 10 homeowners with a mortgage was at least one payment late, and thus delinquent, while another 4 percent had entered the foreclosure process on their loan.

Nowhere is there less sunshine in this picture than Florida. The survey found that from April to June, 12 percent of all Florida mortgages were in the foreclosure process and about 23 percent of all Florida mortgages_ almost one in four_ were late on payments or under threat of foreclosure.

In California, 10.8 percent of all mortgages were 90 days or more past due or in foreclosure. While the Golden State accounts for 13.3 percent of U.S. mortgages, it's also the site of almost 20 percent of foreclosure starts from April to June.

More worrisome is a trend emerging deeper in the numbers: Subprime loans given to the weakest borrowers are now a declining portion of delinquency and foreclosure rates, while prime loans, given to the most highly qualified borrowers, are a rising share.

"The rise in prime delinquencies . . . is a clear indication that employment is the driver of mortgage performance, with the worst performance coming in those areas that are combining jobs losses with large drops in home values like California and Florida," Jay Brinkmann, the group's chief economist, told McClatchy. "We won't see a turnaround in delinquencies until we see improvements in employment, most likely the middle of next year."

Forty-one states notched a rise in their foreclosure rate for prime fixed-rate mortgages in the second quarter, and prime fixed-rate loans accounted for one in three foreclosure starts. A year ago they were one in five starts.

Prime fixed-rate loans are 65 percent of all U.S. mortgages outstanding, but more than 32 percent of foreclosure starts from April to June. They also constitute 27 percent of all U.S. loans now in foreclosure, up from 17 percent in the comparable 2008 period.

The rising delinquency and foreclosure rate for prime loans creates new problems for the Obama administration, which inherited a complicated housing situation.

The administration has unveiled a number of incentives for lenders and mortgage servicers, who collect mortgage payments on behalf of investors, to modify distressed mortgages by refinancing into lower rates or lowering monthly payments.

The Making Home Affordable effort, however, is geared toward borrowers who have jobs and income. The increased rate of delinquency and foreclosure on prime fixed-rate loans reflects massive job losses occurring nationwide. Workers losing jobs won't qualify for housing help.

"The reason people are defaulting on these (loans) is they simply don't have income, and there aren't any loan modification programs for someone who does not have income," said Rick Sharga, the vice president of the Irvine, Calif., firm RealtyTrac, which specializes in foreclosure research.

The trend will grow worse.

"The rising levels of unemployment will probably, over the next nine to 12 months, become the primary impetus for foreclosure activity," Sharga said. "That's the wave that is just starting to hit and we're just starting to see the problems now."

A little truth among all the rosy propaganda painted by the crooks in power.

Add this to what Gerald Celente is saying and you can assemble a good picture of how things really will turn out in the near future.

posted on Aug, 21 2009 @ 09:53 AM
Yeah, its a little difficult to believe when there were a record 360,000 home foreclosures in the US just in the month of July, isn't it? That's the third record set in the last five months. And lets not forget that initial unemployment claims have been creeping back up in recent weeks and were reported at 576,000 yesterday. We haven't seen the worst of commercial real estate defaults, either.

Yeah, it sure sounds like we're almost out of the woods, alright.

posted on Aug, 21 2009 @ 10:33 AM
all is fine.. "Bernanke says US economy on cusp of recovery"..."Federal Reserve Chairman Ben Bernanke declared Friday that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression".. s/Bernanke-says-US-economy-on-apf-3779458072.html?x=0&sec=topStories&pos=1&asset=&ccode=..

or i love this one..."July Home Sales Surge More Than 7 Percent".."The U.S. housing market is rebounding quicker than expected, with home resales in July posting the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires this fall"

i soooo confused...
as long as i have my beer stash hidden in my cave i will be fine... how many more lies are we all going to have to face??? how many more MSM stories will we endure??? crazy world .... zombies are coming...

posted on Aug, 21 2009 @ 10:41 AM
I was listening to an interesting report on NPR about this. They were talking about a few countries that had a positive GDP growth for the second quarter. After hearing where some of these countries were, Japan and Germany, for example, I began suspecting that the reason they are bouncing back first is that is where the money has gone.

Simply put, my suspicion is that this recession has led to a redistribution of national wealth. The US will not come back on top or anywhere close.

posted on Aug, 21 2009 @ 03:14 PM
Economic terms:

Recession: Your neighbor loses his job.
Depression: You lose your job.
Recovery: When Obama loses his job.

Until we actually have a gain in jobs, we will not come out of this. Without jobs there can be no recovery.

posted on Aug, 21 2009 @ 03:20 PM
reply to post by RRconservative

I know you seem to believe in the whole right-wing/left-wing scam that Washington keeps pulling on us poor saps, but do you honestly believe that the economy will get better just because Obama leaves the white house? He's a puppet! He has no more power than anyone else to decide what is going on. Our economy has been marching towards oblivion for over 3 decades.

[edit on 8-21-2009 by rogerstigers]

posted on Aug, 21 2009 @ 03:23 PM
Man, I was having a pretty upbeat Friday until I read this. I guess I'll whip up my Martini a little early today. We all know it isn't getting better. Just don't let Obama in on the secret. I guess the stimulus still isn't working. It's all the GOP's fault. It's all Bush's fault. Certainly, I don't want to blame Barry for all of this.

Just read that Vegas jobless rates hit an all time high of 13.1%. That is a lot of unemployed Porno/Prostitute Card Flippers. California hit a record 11.9%

posted on Aug, 21 2009 @ 03:25 PM
reply to post by jibeho

Unemployment: The Worst-Hit States In July (MAP)

posted on Aug, 21 2009 @ 03:30 PM
To be fair, there are many numbers one can use to measure the health of the overall economy like the GDP, unemployment rates, Dow Jones Industrial Average, consumer confidence index, etc. Just because one set of numbers is on the decline, it does not mean the other numbers could be stable or increasing.

Furthermore, many activities that thrived four years ago, like real estate speculation, will not come back for several years. It would be unfair to say the economy did not bounce back because you are no longer geting a 30% return per year on your real estate investments.

Perhaps the debate should not be if the economy is in recovery, but how it is in recovery. Is the economy recovering in a way which will bring the greatest amount of prosperity to the greatest amount of people? Or are we going through a jobless recovery that will only benefit the wealthiest people? Is the growth going to be based on sound and prudent investments or some other speculative bubble?

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