Posted on Friday, March 6, 2009
Initially foreclosures were being driven by interest rate resets on exotic subprime mortgage loans and were, therefore, fairly able to predict by looking that the upcoming rate reset dates on those loans. More recently foreclosures became driven by folks growing underwater and electing to walk away from their properties. Both lead to high foreclosure numbers in hot bibble areas like Florida, Calfiornia dn Nevada.
Now foreclosures are being increasingly driven by defaults in states like Louisian, Georgia, new York and Texas where layoff are driving mortgage defaults. The new $75 billion bail out strategy will do little to help these folks since without a job they will not be able to qualify for a modification (plan 1) or refinance (plan 2).