Foreclosure Rates Setting New Records
By: Web Producer
Updated: June 6, 2008
Foreclosure Rates Setting New Records
"It doesnt get any worse than this." That the assessment of Mark Zandi, chief economist at Moodys Economy.com about the number of foreclosures in the United States.
The Mortgage Bankers Association reports the rate of foreclosures hit nearly one percent in the first quarter of 2008.
Thats the highest rate since records have been kept starting in 1979.
Patrick Newport, economist at Global Insight, calls it "probably the worst report Ive come across." Newport and other economists predict the high foreclosure rate will continue until the end of the year.
The delinquency rate of those at least 30 days behind in their payments and at risk of foreclosure stands at nearly six-and-a-half percent.
Nationwide, the proportion of homes in some stage of foreclosure is almost two-and-a-percent.
Both of those are new records.
The hardest hit states are Arizona, California, Florida and Nevada.
There are a number of reasons for the high rate of foreclosures.
Many adjustable rate mortgages have been resetting this year creating higher payments.
Banks have tightened rules on lending leaving fewer qualified borrowers.
Prices of homes are falling because of the supply.
That in turn is leaving homeowners with less equity.
(Copyright 2008 by Newsroom Solutions)
RNS-06-06-08 0852CDT
