11 Oct Foreclosures Fall! Great News? Maybe Not…
According to a recent article on CNN-Money, foreclosure delinquencies and defaults actually fell 8 percent in September 2007. Great news, right? Things are finally getting better, right?
Well, not really.
Although foreclosure delinquencies and defaults dropped 8% from August–to “only” 223,538–they were still the second highest number ever recorded, and more than double the rate for September 2006. Only August 2007’s number was higher.
But this could be the start of a downward trend? Well, probably not.
Coming up on the horizon are all of the 2/28 and other “exploding ARM” mortgages that folks signed up for in late 2005 and all of 2006, when closings on refinances and sales were still running at record rates. As noted in my blog, “Foreclosures Up 93% from July 2006 to July 2007,” foreclosure rates on subprime mortgages are expected to jump by 250% before the summer of 2008. And Reuters reported that Countrywide, the country’s largest mortgage lender, said its foreclosures more than doubled in September, and it was planning to cut 20,000 jobs before Christmas–nearly 20% of its workforce.
So it looks as if there’s going to be a lot more bad news before things get better.
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