House Foreclosure Rates

[piasabird]

House foreclosure rates dont seem to high to me . . .

http://money.cnn.com/2007/08/2...postversion=2007082108

Nevada, at one filing per every 199 households, had the highest rate of any state, but California where one in every eight Americans lives, had the most numerically - a total of 39,013 and one for every 333 households. That was nearly four times higher than a year ago.

The highest foreclosure rate is one house in every 199 household. That is like 0.005 chance of a foreclosure. That seems pretty good to me. I think this is much todo about nothing.

California is one in every 333 households.

Is this really that bad?

 

[StageLeft]

Not really.

 

[Vette73]

that is still 1/2%. now take into account it takes several mortages to make up for just 1 bad you get companies that are now not makin gmoney and going under. With them goes the market. Also comps will drop and hurt other areas.

Its a snow ball affect.

 

[PingSpike]

I thought the real problem with the mortgage companies going under, was that investors don't want to buy the shitty subprime mortgage backed securities anymore because they have no idea what they're actually worth...thus the companies don't have any new capital flowing in and can't operate.

I also kind of agree...considering california and nevada were the most overinflated markets half a percent doesn't seem that bad.

Of course, if you're counting only the people that bought in the last 5 years or so I bet its a lot worse. I mean, if your mortgage is 10 years old in california you house is probably still worth over twice as much as you paid for it. On the other...other hand...a lot of people tapped every dime and then some of equity their house had to buy a bunch of crap or maybe try and cash in on the real estate boom.

 

[Lemon law]

The point being, its a psychological question and people tend to be panicky psychopaths. Look at the 1929 stock market crash which was driven partially by an over exuberant
bubble that finally spotlighted the fact that a dozen years of bad public policy had screwed the pooch. People not only quit investing in stocks, they also quit spending. And spending and confidence in the future is a good part of what powers the economy. And 1929 showed exactly how fast an economy can go from decent to a full blown depression.

The problem will come in the form of reduced housing prices. Which means fewer new homes will be built. Which means less employment in the housing sector, which results in entire ripple effects all through the larger economy. With other ripples as certain banls and investors go belly up.

All of these ill effects could have been avoided by better regulated lending practices that have beguiled too many to buy far more house than they can afford. And right now, the biggest screw the pooch danger is that it will push up interests rates across the board. Making servicing the 9 trillion dollar US national debt a much greater part of the Federal budget to add insult to injury.

We may complain about democratic tax and spend.

But right now we have Republican borrow and spend.

Which could now lead to hyper inflate as the only remedy if interest rates go up much. Which wipes out everyone on a fixed income such as social security.

Which may then end the US fantasy that we can keep borrowing and run a balance of trade defect forever. Rational countries will quit lending.

 

[compuwiz1]

It's not that high right now, but were not there yet. Wait and see, when all these subprime customer's arms reset.