WaPo: Growing foreclosure crisis

Some key snippets from this article:

 

·         "In October, for the first time, the number of prime mortgages in delinquency exceeded the subprime loans in danger of default..."

 

·         "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."

 

·         "For a brief time in 2005, the housing market showed signs of cooling nationwide and interest rates edged up. Lenders reacted by reaching out to even riskier borrowers with more subprime and other exotic loans to keep the home-buying frenzy going, said Howard Shapiro, an analyst at investment bank Fox-Pitt Kelton."

 

·         "The turnout [at federal informational events for borrowers] underscores a common complaint from lenders, who say many struggling borrowers do not respond to outreach efforts and when they do, they come with inflated notions about what can be done.

 

"Already, 24 percent of option ARMs were at least two months late in September, up from 5 percent a year ago, said Mahesh Swaminathan, a Credit Suisse mortgage strategist."

 

·         "We're seeing delinquencies rise even before the recast date has hit," Swaminathan said. "After the recasts, the weakness will increase. In 2010 and 2011, the recasts will peak."

 

The Growing Foreclosure Crisis

By Dina El Boghdady and Sarah Cohen

January 17, 2008 | Washington Post