Mortgage defaults rise to record 13%

[steven johnson]

Source: LA Times

The mortgage meltdown continued to worsen in the second quarter as the number of homeowners who are either behind on their payments or in foreclosure rose to more than 13% nationwide -- a new record.

The percentage of loans at least 90 days past due and the number of mortgages in foreclosure both hit new highs, the Mortgage Bankers Assn. reported this morning.

California, Florida, Nevada and Arizona continued to account for the lion's share of the foreclosures with a combined 44% of the national total, although that was down slightly from the first quarter, when 46% of all foreclosures were concentrated in those four states.

"It is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves," said Jay Brinkmann, MBA's chief economist.

Read more: http://www.latimes.com/business/la-fi-mortgage-defaults21-2009aug21,0,4202530.story

---

In December, 60 Minutes had a story warning of 'A Second Mortgage Disaster On The Horizon' because of other mortgage exotics which would become untenable in the next 1 1/2 years, starting with Alt-A and option ARMs and extending into commercial real estate.

I hope Scott Pelley's worst case scenario doesn't come to pass.


"The trouble now is that the insanity didn't end with sub-primes. There were two other kinds of exotic mortgages that became popular, called "Alt-A" and "option ARM." The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates "reset." They went up. And so did the monthly payment. A mortgage of $800 dollars a month could easily jump to $1,500. "

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x50947

http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml?source=mostpop_story

[MercutioATC]

1. Nananananananaa! I can't HEAR you!!!!!

The economy is getting better!!

:P

[steven johnson]

3. Remember, some are predicting a 'W' recession with a transient improvement followed by a downturn

I hope they're wrong, too.

Paul Krugman, February 8, 2008
Conscience of a Liberal:

According to the WSJ,

Lehman Brothers doesn’t expect a recession but sees a similar profile to growth: its forecast calls for a “‘W’-shaped trajectory with anemic growth before and after the stimulus. Our baseline call is for an extended period of weak growth, but absent the fiscal stimulus, a shallow recession.”

The W recession

[prostomulgus]

4. This recession was certainly caused by a 'W'

[SpiralHawk]

5. "Smirk." - xCommander AWOL (R - Occultist Chickenhawk)

[MercutioATC]

6. I don't definitively claim that 2009 is 1930, but there are parallels.

I'm not looking for a "W" recovery, I'm expecting variations on 1929.

[tj2001]

2. It'll get worse. Second wave coming.

[Auggie]

7. Where does the bailout money come from this time?

[Grinchie]

8. Green Shoots! Green Shoots! Darnit I said GREEN SHOOTS!

Why isn't anyone listening!

The recent decision to keep Fed Rate low should tell people something... Oh yes, prolong the agony for as long as possible....

[biermeister]

9. that's the bad news here's the good news-

July 14 (Bloomberg) -- Goldman Sachs Group Inc. posted record earnings as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.

Second-quarter net income was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and was 65 percent higher than last year’s second quarter.

continues-
www.bloomberg.com/apps/news?pid=20601087&sid=a2jo3RK2_Aps

we are so truly fucked. jobless recovery?? fucked I tell you, just fucked!