There is a huge number of owners behind loan payment nowadays

The American economy is yet to recover from the worst Recessions ever. With unemployment at an all-time high of 10%, people are unable to pay the mortgage amounts. In fact, 14% of homeowners in the US have fallen behind on payment of loans. This is a record high for ninth month in a row. That could further jeopardize economic recovery.

According to Mortgage Bankers Association, the housing market recovery could be further hampered by loan defaults. So far, it was the sub-prime mortgage defaults that were responsible for the decline in housing market.

Now it is the prime lenders who are defaulting. These people with sound credit histories are unable to make mortgage payments because of job loss. They form the major chunk of defaults. It may be noted that the real estate sector had started recovering this June. While optimists say that the market is poised for better times, pessimists observe that the market is replete with foreclosed properties. Once they appear in the market, there will be further fall in prices.

It may be noted that four million people are at least 90 days behind payment of mortgage amount. Even if 25% of the buyers do not lose their homes, still that makes up a huge stock of foreclosed properties. This was revealed by the chief economist of the Mortgage Bankers Association, Jay Brinkmann. The foreclosures will further bring down home prices, particularly in Florida and California.

These places are trying to cope with rising unemployment. In these regions, people who have traditional mortgages are driving the foreclosure numbers. In fact, those with good credit histories form 33% of fresh foreclosures in the third half of the year. At the same time, sub-prime loans are driving foreclosures less now. From 35% in 2008, it has dropped to 16 per cent.

Even loans that enjoy the backing of Federal Housing Administration are in trouble. Above 18% of these borrowers are late in payment or facing foreclosure. The worst-hit are California, Arizona, Nevada and Florida. These states account for 44% of all foreclosures.

In Florida, 13% of loans are in foreclosure. This is the highest with Nevada closely following it with nine per cent foreclosure rate. Experts say that unless the employment scenario improves, there will be no let up in the foreclosure rate.

Related tags

  • how much are homeowners behind in payment
  • site:foreclosurelistingsblog com loan
  • seo forum

We suggest you to read about: