Friday, April 04, 2008
So, do you think this latest development will have any impact on the collective psyche of those homeowners who have cut back on their spending or taken on second jobs in order to continue making their mortgage payments?
The short answer is "yes".
Bob Ivry at Bloomberg has all the details:
Lenders Swamped By Foreclosures Let Homeowners StayUh ... would you mind tidying up a bit? We want to show your house this afternoon.
Banks are so overwhelmed by the U.S. housing crisis they've started to look the other way when homeowners stop paying their mortgages.
The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.
Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody's Economy.com, a unit of New York-based Moody's Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.
"We don't have a sense of the magnitude of what's really going on because the whole process is being delayed," Zandi said in an interview. "Looking at the data, we see the problems, but they are probably measurably greater than we think."
"Some people stay in their houses until someone comes to kick them out," said Angel Gutierrez, owner of Dallas-based Metro Lending, which buys distressed mortgage debt. "Sometimes no one comes to kick them out."
Real estate broker Georgia Kapsalis is offering a home for sale in Birmingham, Michigan, a Detroit suburb, where the owner last wrote a mortgage check in July. He still lives in the house, she said.