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1 In 10 Homes Going To The Banks

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You know most people tell me houses are still an investment and I won't be able to get on the property ladder in 20 years. Maybe they should look to the US.

Why 1-In-10 Current Borrowers Will Lose Their Home To The Bank

New Observations is forecasting that a minimum of one in ten homes with a mortgage today will be lost to foreclosure in the next two years and that this loss represents a staggering five-million-unit addition to inventory-for-sale.

A record high 4.63% of mortgages were in foreclosure at the end of March The Mortgage Bankers Association reported Wednesday. Much worse, a mammoth 9.54% of mortgages are 90-days or more past due.

Given cure rates are slim-to-nothing-at-all beyond a 60-day delinquency, in practical terms, all of these seriously-delinquent homes will be lost through a sheriff’s auction, a short sale, a deed-in-lieu passing title from borrower to bank, or some other variant of distressed sale. Amherst Securities Group in a Sept. 2009 report said of the cure rate: “The cure rate on 60+ loans has decreased from 66% in early 2005 to 5% in Q2 2009.”

What is obvious and apparent from the cure-rate chart (see above-click for a clear view) is that borrowers who miss a payment are giving up quickly. After two payments are missed, the mortgage is a goner. It’s a new phenomena and adds a serious risk of falling prices for those who currently own homes.

If 50 million homes carry a mortgage, and with 10 percent lost to the bank in the next two years, five million units will be added to the current for-sale inventory. The five million bank-repo homes works out to about 10 months of sales at an average rate. Amherst estimated 7 million liquidations to the bank, but it was unclear over what period of time. The numbers will have even a more exaggerated impact if mortgage-payment performance continues to fall.

Current inventory is at eight months. The recent inventory high was 11 months in April 2008. Our figures already show current supply for-sale at 3.6 million units – which we have estimated is excessive by over 900,000 units (see chart “Units For Sale”-click for a clear view). In an average month 500,000 existing homes sell.

In another derogatory sign, purchase applications fell 27 percent to their lowest point since May 1997. A government-paid down-payment program ended April 30th.

The guesstimate that one-in-ten mortgage borrowers will lose their home is not a wild proclamation. It’s basic math based on the cure rate. What is wild is considering what will happen to real estate prices should mortgage failure gain greater momentum. Serious delinquencies are 30% greater today than a year ago.

A crash has the same irrational exuberance as a mania, except that greed is liberating and fear is terrifying. We have already lost 30 percent of house prices nationwide. There is simply no question that a radical loss in value may still lie ahead. Mortgage performance has gone down hill, and only a strong employment recovery can change the math.[Viva la Recoverah!]

link

KABOOOOOOOOOOOOM!

10-key-charts-mortgage-delinquencies-cure-rate.jpg

http://newobservations.net/

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THE US PROPERTY CRASH IS IN NO WAY OVER. There are 1 in 8 adults and 1 in 4 kids in the great USA living on govt food stamps. That's why Walmart are worried. The only good reason for a small upsurge in Consumer spending there recently has been that so many are simply defaulting on their mortgages and living mortgage and rent free until moved on, that dispoable income has temporarily risen.

The Eurozone crash is beginning and the US will be next in the frame.

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I predict that this is where it will end (something planned by evil money men all along): The final capitulation in the property market in the US will result in so many people walking away from their mortgages, that the banks will not be able to sell a fraction of the stock...but they don't want to, they want perma-slaves. The government will pass some sort of emergency act allowing the banks to remain solvent and rent the properties, creating private sector controlled social housing, all under the guise of helping the poor to have homes and helping the banks to stay afloat. It is ugly, and evil, but it is coming.

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ans to think that all those houses are the actual security for BILLIONS of CDOS that are held by our banks, our government, our local authorities, out pension funds and god knows what else.

and yet, some say the financial crisis is dealt with and Greece is something new.

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I predict that this is where it will end (something planned by evil money men all along): The final capitulation in the property market in the US will result in so many people walking away from their mortgages, that the banks will not be able to sell a fraction of the stock...but they don't want to, they want perma-slaves. The government will pass some sort of emergency act allowing the banks to remain solvent and rent the properties, creating private sector controlled social housing, all under the guise of helping the poor to have homes and helping the banks to stay afloat. It is ugly, and evil, but it is coming.

:ph34r:

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I saw a chap from NY stock exchange news on Sky earlier who stated that 1 in 7 homes/properties in the USA are 'distressed' ie. In the process of being reposessed or have mortgage payments missed on them.....that equated to one huge number!

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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