The Growing Foreclosure Crisis: "Those in trouble are not, primarily, lower-income borrowers."

[DeepModem Mom]

WP, pg1: The Growing Foreclosure Crisis
One oft-repeated assertion no longer holds true. Those in trouble are not, primarily, lower-income borrowers. The foreclosure crisis has become a wave, afflicting neighborhoods of every stripe -- but particularly communities created by the boom itself.
By Dina ElBoghdady and Sarah Cohen
Washington Post Staff Writers
Saturday, January 17, 2009; A01

....Both the departing and incoming administrations in Washington have promised help on the foreclosure front, but providing help requires federal regulators to get their collective arms around the size and shape of the crisis. That isn't easy. No one agency collects information on every loan, every borrower and every delinquency.

But interviews and a Washington Post analysis of available data show that the foreclosure crisis knows no class or income boundaries. Many borrowers ensnared in the evolving mortgage mess do not fit neatly into the stereotypes that surfaced by early 2007 when delinquency rates shot up. They don't have subprime loans, the lending industry's jargon for the higher-rate mortgages made to borrowers with shaky credit or without enough cash for a down payment.

The wave of subprime delinquencies appears to have crested. But in October, for the first time, the number of prime mortgages in delinquency exceeded the subprime loans in danger of default, according to The Post's analysis.

This trend shows up most acutely in California and other high-growth regions, such as Arizona, Nevada, Florida and pockets of the Washington region, most notably in Prince William and Prince George's counties.

The recession has made it tougher for people to pay their mortgages, and crashing home prices have left many borrowers underwater, unable to sell or refinance their way out of trouble. One of every five mortgage holders now has a home worth less than the mortgage on it, according to First American CoreLogic, a firm that tracks mortgages and provided data for The Post's analysis....

The foreclosure crisis hasn't played itself out. The next wave looms in the form of a new batch of adjustable-rate mortgages scheduled to reset over the next two years. Unless the market comes back with a roar, which is unlikely, more borrowers will struggle to hang on to their homes....

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/16/AR2009011604724_pf.html

[teenagebambam]

1. Yep, I'm there.

Florida. 2-income family. Bought the house we could afford. Borrowed against equity to fix problems we didn't know were there, til the bank froze our equity. Now we're underwater and screwed. The ONLY upside to being gay and thus not allowed to be married is that one of us might walk away with our credit intact.

Edited to add: Started trying to proctively work with the bank SIX MONTHS ago. They wouldn't even talk to us because all our bills were paid on time. So we stopped paying not because we wanted to, but because it was the only way to get them to answer a f*cking question.

[depakid]

2. Time for "Right to Rent"

It's not just for subprime folks:

http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-subprime-borrower-protection-plan/

More on the rationale:

Right to Rent: Helping Homeowners Without Throwing Money at Banks

http://www.huffingtonpost.com/dean-baker/right-to-rent-helping-hom_b_156913.html

[monmouth]

3. Palm Beach homes, estates and condos...Friends of Madoff are

selling everything. It's very sad in an odd way. These are smart people albeit greedy, and should have known better. They're blaming their accountants, etc.....

[chill_wind]

4. Damn it. The essence of this data was available during the bailout debate.

Too bad WAPO did nothing examine it and to stop the demagoguery of the popular "irresponsible po' folk" memes then.

And STILL, they just won't say it-- speculators--commercial and high-income risk-takers aplenty.

Anyway, Washington and Wall Street got what it wanted, and they're about to win round two, as well.

October DU thread with published public research:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4168807

http://www.wksu.org/news/story/22415

"Instead, the results suggest that the biggest losses in the mortgage crisis are not for owner-occupied homes, but for commercial real estate loans, and loans for houses bought as investments or built on speculation.

If some of us at DU could know that even back then, WAPO and all the rest of MSM could have known it too. But that isn't what you were told.

[Riley18]

5. There are plenty of people who are at risk of losing their homes, but rarely

are they interviewed on TV or newspapers. At least where I live in Florida. I just sent off a hardship letter to Bank of America and probably won't get anywhere. It's worth a shot though.

[NashVegas]

6. Did You Read The Other Thread? The One About Porn Movie Shoots In Peoples' Homes?

One of the non-porn home owners who invited movie crews to film in her house:

The daily fee paid for the sort of work done at Gupta’s 3,000-square-foot condo in the city’s signature 90210 ZIP code is usually $2,000 to $3,000, Darrell said. That would cover about half of her monthly household bills, including maid service.

She's quoted in the story as saying she's renting her house to film crews "to maintain her lifestyle."

[htuttle]

8. I thought it was interesting the way she defined 'her lifestyle'

I mean, one would think that with a movie crew stumbling through their house, they'd have some trouble maintaining the same routine...

[chill_wind]

7. K & R.