Although foreclosures are increasing lately, they are not at an all time high according to RealtyTrac. The excerpted second paragraph from an article with the obligatory MSM negative spin, titled More Americans are losing their homes, is included below (bold font added to emphasize what the MSM wants to discount):
"The number of foreclosures is still low on a historical basis, but it has been rising steadily over the past year, RealtyTrac reported. Job losses in some regions were to blame, but so, too, were risky borrowing practices that left homeowners little wiggle room on their mortgage payments. And with the pace of appreciation stalling and interest rates rising, many economists and industry observers expect the pace of foreclosures to accelerate this year."
In the last few years, many buyers took out interest-only, variable-rate loans, and in some cases put no money down to afford a house, said Frank Nothaft, chief economist with government-chartered mortgage giant Freddie Mac. He estimates one out of every three loans issued in 2005 was an adjustable rate mortgage. Now that we’ve seen 14 consecutive interest-rate increases since June 30, 2004, many of these loan rates are bumping up, increasing the size of mortgage payments.
Nothaft estimates that $500 billion in variable rate mortgages will reset, or rise, sometime this year, leaving many with a payment they can no longer afford. “Those would be the candidates for … delinquent status,” he said.
Foreclosures had been at historic lows in the past three years as rapidly appreciating home prices gave financially strapped owners the option to refinance, sell their house at a profit or take out a cheap home equity line of credit. But with the pace of appreciation slowing in many markets and interest rates rising, for many, these avenues have been cut off.
People have been using their houses as ATMs...this practice is going to come to a screeching halt, as lenders have already tightened their standards and people aren't going to be able to refi their way out of this mess. “You’re really out of options,” said Susan Wachter, professor of real estate at the Wharton School at the University of Pennsylvania.
Thanks.