From Yahoo Finance this morning:
WASHINGTON (AP) — The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages.
The Mortgage Bankers Association reported Thursday that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent, marking the third consecutive quarter that this figure has set an all-time high.
The delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring, rising to 5.12 percent of all loans, up nearly three-fourths of a percentage point from the same period a year ago.
Doug Duncan, the MBA’s chief economist, said the worsening performance was driven by two factors — heavy job losses in the Midwest states of Ohio, Michigan and Indiana and the collapse of previously booming housing markets in California, Florida, Nevada and Airzona.
Note the term he chose for the former "Fantastic Four" of the boom- collapse – not moderate, not normalize. It’s going to be a long cold winter in real estate this year- particularly here in the sunbelt.
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Moin,
and we are still early in the process…..
Very reassuring that right now the loan loss reserves are at new lows….
“for the fifth quarter in a row, reserves failed to keep pace with the increase in non-current loans. The industry’s coverage ratio of reserves to non-current loans fell to the lowest level since the third quarter of 2002, while non-current loans posted the largest quarterly increase since the fourth quarter of 1990.”
So, there I was, getting dressed for work this morning … listening to CNBC in the background … and this report comes on :
“Record foreclosure rates in Ohio, Michigan, Indiana, California, Florida, Nevada, Arizona, Illinois, Kentucky, Tennessee, Pennsylvania…”
Then, some talking head – possibly a spokesman for the real estate industry – in a last ditch attempt to put some positive spin on these unprecedented, absolutely horrible numbers said: “But if you exclude those states, the foreclosures rates are still quite low.”
I nearly fell off my bed.
Moin NVmike,
i havn´t heard it but i have read the same quote.
“Fools day” in August…
Time for the “core” foreclosure rate..
The “core foreclosure rate.” Right! It excludes the volatile states.
I like it!
NVMike-
Don’t ya love it? I don’t know what percentage of the US population lives in those states, but I think it would be fair to say “a lot.” Not only that, this number has nowhere to go but up.
I guess these guys are under pressure to say SOMETHING positive.
I believe that the falsification of any and all economic indicators (not just inflation figures) by chucking out selected hunks of the data didn’t really get going until last January, when US News & World Report hack James Pethokoukis came up with this gem: “Just look at today’s powerful retail sales numbers for December. They rose a better-than-expected 0.9 percent. ‘Core’ retail sales–excluding autos, gasoline, and building materials – rose by the same amount. On a year-to-year basis, this measure of ‘core’ sales has accelerated to 6.9 percent growth from 5.7 percent in October.” I indulged in a bit of outrage at the time in ” ‘Core’ Meltdown” (Jan 17th).
Doug Duncan started his core foreclosure rate codswallop in mid-June, and BW’s Maya Roney and Peter Coy immediately started twittering away like a couple of MBA choristers. I sincerely hope poor Mara didn’t injure herself biting her tongue. It’s just disgusting that this tired old obfuscation is still making the rounds of the MSM nearly 3 months later. I’m not much more mellow about this now, and at the time all I could do was rant: “But looking on the bright side, and according to my back-of-the-envelope calculation, those states represent 145 electoral votes, a whopping 27%. Win in America’s 7 non-core foreclosure states, and you’re more than halfway home in the 2008 election.“
Moin Twist,
this is from Greenberg
Because the Golden State accounts for 13% of the country’s gross domestic product or the total value of all goods and services produced nearly double the No. 2 contributor, New York. That means that what happens in California, home to such growth industries as high-tech, biotech, venture capital and film, doesn’t necessarily stay in California.
The impact of slow economic growth, or even recession, in the state will ripple through the rest of the country.
Jan-Martin-
Thank you for the CA info, and also to John for the electoral votes. Obviously these states are too significant to just sweep under the rug and say, “Other than that Mrs. Lincoln, how did you like the play?”
I love Airzona — the AP story still has that typo in as of now …
According to an About Geography page, the US population had “a July 1, 2002 estimate of 288,368,698.”
I’ve borrowed the following table from the same site. The bottom line is that as of mid-2002, the non-core seven had 30.2 percent of America’s population.
(35,116,033 + 16,713,149 + 11,421,267 + 10,050,446 +
6,159,068 + 5,456,453 + 2,173,491) / 288,368,698
== 0.302008878 …
(the subtotal — combined population of 7 states == 87,089,907)
John-
Things aren’t necessarily all that rosy in other states either. This morning’s Dallas Morning News is reporting:
A few folks live in Texas too.
According to the MBA’s Chief Eco “..additionally, the performance of prime and subprime adjustable rate mortgages (ARMs) is contributing significantly to the overall results.”
Hmmmmm… PRIME ARMs also contributing significantly to what looks like really ugly numbers. Apparently people who can actually afford it (more) are starting to default too.
It is now clear, from the recent Case-Shiller House Price Index showing a decline of over 3 % YoY nationwide and this week’s other data, that the housing decline is accelerating rather quickly.
Sorry it’s a bit late, but I’ve just put up the latest graph of Phoenix area notices of trustee’s sales here.
Enjoy!