One In Three Chance You’ll Soon Owe More Than Your House Is Worth: Tech Ticker, Yahoo! Finance

One In Three Chance You’ll Soon Owe More Than Your House Is WorthPosted Aug 20, 2009 11:15am EDT by Henry BlodgetRelated: xhb, tol, len, kbh, dhi, phmForeclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter.However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter.That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they’ll owe more on their mortgages than their houses were worth).Half of mortgage holders means about one-third of American households. Put another way, Weaver forecasts 25 million mortgage holders will be under water by 2011, up from an estimated 14 million currently.Aside from the mega-bummer of owing the bank more than your house is worth, underwater mortgages exacerbate another problem: foreclosures. In previous housing busts, being underwater led to a greater likelihood of default, and Weaver believes this the foreclosure problem will be much worse this time around.In a recent report, Weaver analyzed all the various kinds of mortgages in the US and estimated that 48% of them would be underwater by 2011. This includes “prime” borrowers, of whom a startling 41% will be underwater.

Vodpod videos no longer available.

Foreclosures Up 48 Percent From Year Ago: RealtyTrac

I think I can pay the mortgage this month?

By AMY MCALISTER
Published: June 13, 2008

Foreclosure filings continued their surge in May, jumping 48 percent from levels recorded one year earlier as the number of distressed borrowers continues to mushroom in key housing markets across the nation. RealtyTrac Inc. reported Friday morning that 261,255 properties were subject some sort of foreclosure activity — default notices, auction sale notices and bank repossessions — during the month, up 7 percent from April.

That number translated into foreclosure filings for one in every 483 U.S. households, the highest such rate of foreclosures since RealtyTrac began normalizing against population in January 2005.

“May was the third straight month where we’ve seen a month-to-month increase in foreclosure activity and the 29th straight month we’ve seen a year-over-year increase,” said James J. Saccacio, chief executive officer of RealtyTrac.

“The nationwide rate of increase for default notices and foreclosure auction notices slowed in May, with default notices up just 1 percent from the previous month and auction notices down 3 percent from the previous month.”

While notices of default and trustee’s sale notices inched upward, the total number of REO properties in RealtyTrac’s property database surged above 700,000 as repossession activity doubled year-ago activity.

California, Florida lead the way
Foreclosure filings were reported on 71,930 California properties, 37,364 Florida properties and 12,959 Arizona properties during May, RealtyTrac said — the three highest state totals in May. Michigan was not far behind Arizona, however, with 12,792 properties receiving foreclosure filings during the month.

Illustrating just how bad the housing market is in the two former “bubble” states, for the second month in a row, California and Florida cities accounted for nine out of the top 10 metropolitan foreclosure rates among the 230 metropolitan areas tracked in the RealtyTrac report.

Seven California cities were in the top ten, led by Stockton in the top spot. One in every 75 Stockton area households received a foreclosure filing in May — more than six times the national average. Other California cities in the top 10 were Merced, Modesto, Riverside-San Bernardino, Vallejo-Fairfield, Bakersfield, and Sacramento.

The Cape Coral-Fort Myers metro area in Florida registered the second-highest metro foreclosure rate in May, with one in every 79 households receiving a foreclosure filing during the month; the other Florida metro area in the top 10 was Port Lucie-Fort Pierce, ranking tenth.

Las Vegas was the only city outside of California and Florida with a foreclosure rate ranking among the top ten, RealtyTrac said. One in every 96 Las Vegas households received a foreclosure filing in May, more than five times the national average and sixth among the metro areas.

Other metro areas with foreclosure rates among the top 20 included Phoenix (20), Detroit (14), San Diego (17) and Miami (19).

For more information, visit http://www.realtytrac.com.

AP Poll: Mortgage Payments Worry Many

US News and World Report

Apr 14, 3:26 PM EDT

AP Poll: Mortgage Payments Worry Many


WASHINGTON (AP) — One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home’s value is shrinking, according to a poll showing widespread stress from the nation’s housing crisis.

In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won’t a buy a home in the next two years. Continue reading

The Cash Advantage (Even When Rates Are Low)

NY Times

Published: March 16, 2008

ALTHOUGH short-term interest rates have been dropping, many advisers still recommend that investors hold plenty of cash — and that they keep it in safe and simple accounts. “The biggest mistake people make is reaching for yield and putting their capital at risk,” said David Darst, the chief investment strategist of the global wealth management group of Morgan Stanley. “They should think of cash as their safe harbor.”

Over the last year, Mr. Darst has raised his recommended allocation to cash several times. Morgan Stanley now advises individual investors to hold 16 percent of their portfolios in cash, up from 5 percent a year ago.

And Mr. Darst said that cash really means cash — with nothing fancy about it. He suggests putting this money into some combination of money market mutual funds, short-term certificates of deposit or Treasury bills. Continue reading

CNNMoney.com – Interest Rates Tumble

CNN Money

CNNMoney.com
The bond yield tumble, and the economy
Monday March 24, 7:15 am ET
By Paul R. La Monica, CNNMoney.com editor at large

Bond yields have plunged in the past few weeks. And even if you are not an active investor, you should care about what’s been going on in the bond markets lately. Here’s why.

The yield on the benchmark U.S. 10-year Treasury currently stands at about 3.33%, down from nearly 4% about a month ago. The rate on this long-term government note is a key factor behind what happens to fixed-rate mortgages.

If rates continue to fall, they could hit not only a new low for the year – the 10-year briefly touched 3.28% in January – but could come close to falling below the 3.07% level they hit in June 2003, which was a 45-year low at the time. Continue reading

Economic Update – March 9,2008

image.jpeg

  • Housing Foreclosures hit an all time high of 0.83% of all mortgages nationwide.

  • Over 5.8% of homeowners were behind in their mortgage payments, the largest number in more than two decades.

  • House prices lost a staggering 8.9% in 2007 – and they’re still dropping.

  • The supply of unsold houses rose to 4 million, or to over a 10 month’s supply.Homeowners’ equity fell below 50% for the first timesince 1945, hitting a new low of 47.9%. As Barry Ritholtz expressed, never before have banks and other various and sundry lenders owned more of the average American’s house than they do.

  • For February 2008 – the economy lost 63,000 jobs. That means 63,000 people lost their job in one month. Actually, the number was 101,000 people who lost their jobs in February, but the government hired 38,000 just to make the numbers look better.

  • In January 2008 – the consumer price index, the widely reported statistic used to measure inflation, rose 4.3% from January 2006.

  • According to John Williams of Shadow Government Statistics, he comes up with a reading of 11.8% inflation for the January CPI calculation. With oil at $106-a- barrel and every kind of commodity up 30% or more (aluminum, oats, silver-hit a 27 year high recently), and double-digit gains in other commodities such as, coffee, corn, wheat, zinc, etc. This just makes more sense than the economic statistics given to us by the government.

By STEPHEN S. ROACH – from Hong Kong

nytlogo153x23.gif

March 5, 2008
Op-Ed Contributor

Double Bubble Trouble

Hong Kong

AMID increasingly turbulent credit markets and ever-weaker reports on the economy, the Federal Reserve has been unusually swift and determined in its lowering of the overnight lending rate. The White House and Congress have moved quickly as well, approving rebates for families and tax breaks for businesses. And more monetary easing from the Fed could well be on the way.

The central question for the economy is this: Will this medicine work? The same question was asked repeatedly in Japan during its “lost decade” of the 1990s. Unfortunately, as was the case in Japan, the answer may be no.

If the American economy were entering a standard cyclical downturn, there would be good reason to believe that a timely countercyclical stimulus like that devised by Washington would be effective. But this is not a standard cyclical downturn. It is a post-bubble recession.

The United States is now going through its second post-bubble downturn in seven years. Continue reading