Foreclosure Numbers: Blame It On The West (Mostly)
Sorry for being a little late on posting the blog today,but these numbers from the Mortgage Bankers Association are dense, and I’m also working on a piece for NBC Nightly News tonight (that’s my plug to get you all to watch it).
Ok, so before everyone gets crazy about that fact that the rate of new foreclosures is up 51% from a year ago (Mortgage Bankers Association National Delinquency Survey, Q2), to a new record high, it’s really important to point out that the four states of California, Arizona, Nevada and Florida make up a full third of all the new foreclosures. Insert “WOW” here.
It shouldn’t come as any surprise. These are the states where investor/speculators ran like rabid raccoons, biting off way more than they could chew, their furry little heads swirling with offers of no-money-down, adjustable rate mortgages that seemed to offer free money for the taking.
These four states make up 42.5% of all Prime ARMs outstanding and 34.6% of all Subprime ARMs outstanding. On top of that, these are the states where homebuilders also went a little rabid, seeing the potential and building as fast and as furiously as they possibly could. No shocker that these states are leading the price drops too.
So before we get all teary-eyed over some homeowner in St. Louis who loses his home to foreclosure, step back a bit, because that’s not the story. The rest of the country, minus Michigan, Ohio and Indiana, where the local economies are in the toilet, is doing just fine. Foreclosures, minus those seven states, are actually down across the board.
Questions? Comments? RealtyCheck@cnbc.com