Friday, April 21, 2006

'A Remarkable Number' Of Defaults

Some foreclosure reports. "Colorado lenders and brokers have led the nation in risky mortgage schemes, luring homeowners to dangerous low-rate and interest-only loans. Now we lead the nation in foreclosures. The danger signs were clear last summer: Denver ranked fourth in the nation in interest-only loans, and more than two-thirds of homebuyers were borrowing more than 80 percent of the price of their homes. About 43 percent of all loans in 2004 were interest-only, double the national numbers."

"But bubbles burst. Now, with interest rates going up, and principle payments coming due, a remarkable number of homeowners have mortgages they can't afford."

"Thousands of homes in foreclosure could put Colorado's housing market under severe stress this summer, according to real-estate experts. Colorado reported 5,392 foreclosures in March, making for the highest rate per household of any state."

"Thirty-one percent, or 1,648, were in the preforeclosure or notification stage, where delinquent borrowers have the best chance to keep their property. Fifty-four percent, or 2,894, were headed to auction, where outside investors can claim the property by paying off the mortgage. Sixteen percent, or 850 homes, were in the hands of lenders, who are often forced to sell the properties for whatever they can get."

"Entry-level housing markets away from job centers such as the Denver Tech Center, downtown Denver and the Boulder corridor have proved the most vulnerable, real-estate analyst Mike Rinner said. Adams and Arapahoe counties are suffering the highest foreclosure rates in the state, while higher-end markets such as Boulder and Douglas counties are holding up much better."

The Boston Herald. "Shady mortgage operators have been flooding unbelievably easy credit into Boston’s neighorhoods. But the payment on all those high-interest rate, no-money-down loans may now be coming due in a tidal wave of forclosures."

"Banks and mortgage lenders have begun foreclosure proceedings on 238 homes across the city. That is a 63 percent increase over last year, reports John Anderson. But those numbers, as bad as they are, look even worse as you zero in on neighborhoods like Dorchester and Mattapan."

"Bank notices of intent to foreclose have shot up 118 percent in Ward 18, which covers Mattapan and Hyde Park. That’s 48 notices so far this year, compared to 22 during the same period in 2005. In Dorchester, foreclosure proceedings are up 43 percent so far this year."

"Behind the real estate trend are some very suspect mortgage companies from California and elsewhere that will give you a mortgage, whatever your history. Enough bad debt and bankruptcies to sink the Titanic? No problem. What these lenders won’t tell their prey is that they will just as quickly foreclose if you fall behind on the crushing monthly payments."

"If the statistics aren’t bad enough, the horror stories are even worse. There’s the poor Fields Corner homeowner who lost her two-family home, not once, but twice, to foreclosure. Undaunted after Citizens Bank foreclosed on her $159,000 mortgage in 2002, she bought it back again, this time for a bargain $310,000. A well-known 'subprime' lender provided a no-money-down loan."

"That lasted all of 14 months, until the Bullard Street home was foreclosed upon earlier this month, the second time in five years, Anderson points out. 'The last two days we had 28 more defaults,' Anderson said. 'They are just piling in, right and left.'"


At 9:50 PM, Blogger Ann said...

ANYONE with a mortgage needs to be aware of what is really going on within the mortgage industry.

At 11:06 AM, Blogger Chip said...

Some friends of mine here in Florida, who I believe are believers in the "RE only rises" philosophy, are going to Colorado today for a brief visit. I wonder if that experience will affect their thinking.

At 11:07 AM, Blogger Chip said...

This comment has been removed by a blog administrator.

At 8:21 PM, Blogger Swim Mistress said...

There may be a lot of foreclosures here in Colorado, but there was no housing price bubble like in CA, FL or AZ in the past 3 years. The foreclosures here in CO are due to a poor State economy and massive job losses after the tech stock crash.


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