Foreclosures Threaten U.S. House Prices
A Look Ahead To the Great Resetting
October 3, 2009, Washington Post
Millions of adjustable-rate mortgages are going to reset in the coming years, possibly to higher interest rates, creating the prospect of a new round of foreclosures. About 10 percent of all mortgages in this country are scheduled to adjust in the next few years, with the numbers peaking in mid- to late 2011, according to First American CoreLogic. Those loans are worth about $1 trillion, and nearly 20 percent of the borrowers who have them are already seriously behind on their monthly payments.
Foreclosures Threaten U.S. House Prices
October 5, 2009, Financial Post
After a three-year rout in the U.S. housing market, it is a big deal that house prices are rising for bank earnings and ultimately for consumer demand. Unfortunately, the housing market is too fragile to call a definitive bottom in the near term. Mortgage delinquencies continue to increase in the United States and foreclosures are gaining strength. An "ever growing pent-up supply of foreclosures in-process" is the "elephant in the room" says Ivy Zelman, housing analyst at Zelman & Associates based in Cleveland. Between 5.1 million to 5.8-million mortgages are at risk to foreclosure in the United States, according to a recent report by Zelman, a number so big that it threatens to swamp the current pace of single-family existing home sales of 5.1-million units per year.
U.S. Treasury Set to Finalize Home Short Sales Plan
October 5, 2009, ABCMoney.com
The U.S. Treasury will soon finalize a plan to expand its incentives for mortgage companies to include “short sales" as a way to stem a rising tide of foreclosures, according to a Treasury spokeswoman. Short sales," or sales of homes for less than the balance on existing mortgages, are seen as a key way to supplement other efforts such as loan modifications to steady housing. Unlike most modifications, "short sales" eliminate the problem of negative equity that has become a big reason for defaults as home prices have plunged.