Bernanke: Foreclosure Proceedings Were Started On 1.5 Million Hoomes In 2007

NationalEconomist.com Blog ^ | Robert Wegner

[drbasketball]

In a speech Monday night before the Columbia Business School’s 32nd Annual Dinner, Fed Chairman Ben Bernanke said that, “”About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure.”

He also said that, “Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher in 2008.”...

[stylin19a]

About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure.”

sub-primes account for approx 13 % of all mortgages. Is 25% of that as big a deal as it's being played ?

[ovrtaxt]

wow that’s a lot of Hoomes. sounds series.

[Always Right]

sub-primes account for approx 13 % of all mortgages. Is 25% of that as big a deal as it's being played ?

A 4% default rate is too big for mortgages.

[OpusatFR]

Take a look at the charts on foreclosures Mish has posted on his site. The last chart is non-owner occupied homes. Hugh and series.

http://globaleconomicanalysis.blogspot.com/

[OpusatFR]

This is what you get when you cross a Paulsen with a Bernake and irradiate them.

“Here’s one way that such a program might work:

The federal government would lend each participant 20% of that individual’s current mortgage, with a 15-year payback period and an adjustable interest rate based on what the government pays on two-year Treasury debt (now just 1.6%). The loan proceeds would immediately reduce the borrower’s primary mortgage, cutting interest and principal payments by 20%. Participation in the program would be voluntary...

Although individuals who accept the loan would not be lowering their total debt, they would pay less in total interest. In exchange for that reduction in interest, they would decrease the amount of the debt that they can escape by defaulting on their mortgage. The debt to the government would still have to be paid, even if they default on their mortgage.”

http://economistsview.typepad.com/economistsview/2008/03/martin-feldstei.html

[CPOSharky]

The federal government would lend each participant...

The government can't fix anything without making it worse for longer than if they ignored it. And sometimes it prolongs it forever.

[stylin19a]

maybe...but there is (are?) so many stats out, that my head is starting to spin

this from Cox news - 03/07/08

"Almost 8 percent of U.S. home loans were past due or in the foreclosure process, the survey showed. The delinquency rate was 5.82 percent and foreclosure rate 2.04 percent of all outstanding loans in the fourth quarter of 2007, according the report.

This from 03/10/08

...For sub-prime fixed rate loans the foreclosure rate is 1.52%, while the variable rate loans rate is 5.29%.
... Currently 42% of the foreclosure starts are sub-prime variable rate loans. These loans only make up 7% of the total loans out there.
... the 6 month LIBOR rate, which most of the sub-prime adjustments are based on has come down 2.5% lately....

Next is the fact that 18% of the foreclosures are on non-owner occupied properties.