Congressionlal Report on Mortgage Progress in the US - It's Worse Than You Think

Do you like scary stories? So do I, especially when it is written by professionals, paid with your US tax dollars (or perhaps by those nations that are financing America's debt). Enjoy these excerpts from the Congressional Oversight Panel's October Oversight Report, which was published on October 9, 2009.

The United States is now in the third year of a foreclosure crisis unprecedented since the Great Depression, with no end in sight. Of the 75.6 million owner-occupied residential housing units in the United States, approximately 68 percent (51.6 million) of homeowners carry a mortgage to finance the purchase of their homes. Since 2007, 5.4 million of these homes have entered foreclosure, and 1.9 million have been sold in foreclosure.

From July 2007 through August 2009, 1.8 million homes were lost to foreclosure and 5.2 million more foreclosures were started. One in eight mortgages is currently in foreclosure or default. Each month, an additional 250,000 foreclosures are initiated, resulting in direct investor losses that average more than $120,000. These investors include the American people.

Absent a significant upturn in the broader economy and the housing market, another 3.5 million homes could enter foreclosure by the end of 2010. Foreclosure rates are now nearly quadruple historic averages. At the close of second quarter 2009, the Mortgage Bankers Association reported that 4.3 percent of mortgages, 15.05 percent of sub-prime loans, and 24.40 percent of sub-prime adjustable rate mortgages (ARMs) were currently in foreclosure. In addition, 9.24 percent of all residential mortgages were delinquent, a rate nearly double historic norms. Homeowners avoiding foreclosure, but still losing their homes in preforeclosure sales (short sales) or deeds-in-lieu (DIL) transactions further add to this crisis.

My favorite statistic is from Figure 4 on page 15. This chart shows for each state the percentage of homes with negative equity or close to negative equity (loans are worth between 95% and 100% of the homes value). The winner with 59% is Nevada.

Having fun yet? Can't wait to read more? Then download the full report below.

Source
Congressional Oversight Panel: October Oversight Report -
An Assessment of Foreclosure Mitigation Efforts After Six Months (October 2009)