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More than one in every eight homeowners with a mortgage was behind on home loan payments or in some stage of foreclosure at the end of the second quarter, as mounting unemployment aggravated the housing crisis, the Mortgage Bankers Association said on Thursday.
The percentage of loans that were in foreclosure or at least one payment past due rose to 13.16 per cent, the highest increase since the MBA began keeping records in 1972 and a jump of more than a percentage point since the first quarter.
While the proportion of foreclosures started on borrowers with subprime adjustable-rate mortgages fell dramatically in the second quarter, foreclosure starts on traditional prime fixed-rate loans saw a dramatic increase. Prime fixed-rate loans accounted for one in three foreclosure starts at the end of the second quarter. A year ago they accounted for one in five.
“There has been a shift in the problem from one driven by the types of loans to one driven by macro problems in the economy and drops in house prices,” said Mr Brinkmann.
Florida continued to be the worst state in the union for mortgage performance, closely followed by Nevada. Florida has 12 per cent of its mortgages in some stage of foreclosure – the highest in the country – while 23 per cent of the Florida mortgage market is at least one payment overdue. This is almost twice the national average if Florida’s performance is excluded.
The next highest states were Nevada at 21.3 per cent of loans at least one payment past due, Arizona at 16.3 per cent and Michigan at 15.3 per cent.
The more you try to squeeze people out of whatever little income they have left after all the taxes that are taken out now, the more resentful the people are going to be of gov't. As Peter Schiff says the time to hit the brakes is over, now it's time to brace for impact.
Iceland's banking crisis and foreign debt; it's decision to push back against IMF and World Bank austerity.....
Can Iceland and Latvia pay the foreign debts run up by a fairly narrow layer of their population? The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings.
Resentment is growing not only towards those who ran up the debts ... but also towards the foreign advisers and creditors who put pressure on these governments to sell off the banks and public companies to insiders. Support in Iceland for joining the EU has fallen to just over a third of the population.....
A pragmatic economic principle is at work: a debt that cannot be paid, will not be. What remains an open question is just how these debts will not be paid. Will many be written off? Or will Iceland, Latvia and other debtors be plunged into austerity in an attempt to squeeze out an economic surplus to avoid default?
The latter option may drive debt-laden countries in a new direction. Eva Joly, the French prosecutor brought in to sort out Iceland's banking crisis, warned this month that Iceland would have little left but its natural resources and strategic position: "Russia, for example, might well find it attractive." The post-Soviet countries are already seeing voters shift away from Europe in reaction to the destructive policies the EU supported.
Something has to give. Will rigid ideology give way to economic reality, or the other way round?
The writer is professor of economics at the University of Missouri Source
the housing crash along with the devaluation of the dollar has brought a horde of foreign nationals (China and UK) now investing on homes in the US...But this something that the government is not telling letting people believe that Americans that are losing their jobs and losing their American dream home are still buying homes back.
Opportunities for real estate investment for foreigners is wide and varied in the United States. It doesn't matter where you're from and what currency you'd be using to purchase a property, you have a property waiting for you. Source