In more depressing housing news, the Mortgage Bankers Association announced Thursday that a record 12% of homeowners are behind on their mortgage or in foreclosure. They do not expect the number of foreclosures to crest until the end of next year.
In an interesting twist, the foreclosure rate on prime fixed-rate loans has doubled in the last year. They now comprise the largest share of new foreclosures. The financial crisis has also hit many of those previously thought to be invulnerable: Nearly 6% of fixed-rate mortgages to borrowers with good credit are in the foreclosure process.
The foreclosures also appear to be clustered: 46% are located in California, Florida, Arizona, and Nevada.
We’ve tried to keep much of the blog focused on how to get out of foreclosure for those who are affected by the crisis. Those over the age of 62 can qualify for a reverse mortgage, which can help many avoid foreclosure. There are also many state resources that can assist, such as the one in Illinois discussed here.
If there are any options I’ve left out, please comment with them.