Home Loans Past Due or in Foreclosure in California: 1-in-9
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The biggest economic news of the day had to be America's economy shedding over 500,000 jobs last month, a number that has not been exceeded in one month in 34 years. However, below are two statistics that show other troubling news (and a sign that the economy, because of continued job loss and distressed homeowners, will continue on its declivitous path for several more months) that was largely overlooked due to the former news and building political tensions surrounding the possibility of an "auto bailout."
- Home loans past due or in the foreclosure process in the U.S.: 1 in 10.
- Home loans past due or in foreclosure in California: 1 in 9.
California has had more homes in the foreclosure process throughout all of 2008. According to the Mortgage Bankers Association, 3.9% of all homes in the state face foreclosure, compared with 2.97% of homes nationally.
MBA economist Jay Brinkmann said the national trends still reflected intense problems with adjustable-rate subprime mortgages in California and Florida.
"Prime and subprime ARMs continue to have the highest share of foreclosures, and California and Florida have about 54% and 41% of the prime and subprime ARM foreclosure starts, respectively. Until those two markets turn around, they will continue to drive the national numbers,” Brinkmann said.
Naturally, the MBA blamed the sagging economy and rising unemployment for worsening the crisis that began with the abandonment of traditional lending standards during the housing boom. The group said its survey covered more than 80% of the home loans in the country.
With half a million more people out of work, the mortgage meltdown will get its exacerbated push into the second round, where we'll see the prime "Pick-a-Payment" Option ARM loans (which were littered with TILA violations) have interest rate resets, forcing hundreds of thousands of homeowners to default or go into foreclosure.