Looks like the foreclosure mess won’t be going away anytime soon.
Just as all the hoopla over the extension of the home buyer tax credit starts to fade, along comes the The Mortgage Bankers Association to bring the market back to reality.
One in seven loans is now in foreclosure, up from one in ten at the start of the year. It’s the highest on record since the MBA began track this stuff in 1972.
And forget about all those goofy subprime loans. The driver now is the ever rising jobless rate, which has topped 10 percent and may top 11 percent or higher before it settles out.
Foreclosures on prime mortgages accounted for 33 percent of all foreclosures last quarter, up from 21 percent at the start of the year, the group reports.
The mortgage bankers project rising foreclosures well into 2010, not leveling off unitl the jobless rate starts to moderate.
The number of homes seized and sold by lenders, the last step in a months long process, has actually been on the decline so far this year in Massachusetts.
But the number of initial foreclosure notifications sent out by lenders kicking off the process is up, and up dramatically, according to local real estate data tracker the Warren Group, publisher of Banker & Tradesman.
Initial filings were up 11 percent in October over October 2008 and have risen 27 percent year to date.
Here again rising unemployment, not foolish subprime loans, appears to be driving the increase.
It certainly helps back up Rep. Barney Frank’s case that we need to start thinking about emergency loans to jobless homeowners.
And the foreclosure debate is clearly shifting now, from one about personal responsibility to the fallout of a brutal recession.
That’s my take. How about you?
The author is solely responsible for the content.