Judiciary Report - U.S. Foreclosures Hit Record High Again

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U.S. Foreclosures Hit Record High Again

Problem Growing

June 5. 2008

New numbers that have just been released show foreclosures have hit a record high for the first quarter and show no signs of abating.

Homeowners are faced with the difficult task of having to catch up on payments or sell homes in a virtually flat lined real estate market. Banks clearly are not doing enough to ease the crisis, as the numbers keep rising.

Foreclosures hit a record high -- and more coming

Thursday June 5, 4:30 pm ET - Foreclosures surge to a record high -- late payments, too, signaling worse to come.

WASHINGTON (AP) -- The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too -- an alarming sign that the housing crisis and its damage to the national economy may only get worse.

Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices -- extending a vicious cycle.

Slumping home values are being blamed in large part for the rising tide of foreclosures. Troubled borrowers are left owing more to the bank than their homes are worth. They can't sell without taking a huge financial hit, so they just walk away.

Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83 percent over the last three months in 2007.

The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35 percent -- or 2.87 million loans -- compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are 30 or more days past due.

Nearly 8.5 million homeowners had negative or no equity in their homes at the end of March, representing more than 16 percent of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.

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