Posted on Wednesday, June 23, 2010
2/3 of American homes have a mortgage. 56 million. Over half are owned or guaranteed by the GSEs. 35% are on bank balance sheets. 15% are private labels out of Wall Street.
14% of the 56 million mortgages are already delinquent or foreclosure. 56 x 14% is 7.8 million people not paying their mortgage, that means late 30 60 90 days or actually in foreclosure. 91% of those not payimg never will. That’s 7.2 million homes. Loan mod programs slowed down this process. The rate of non foreclosure on late payers is climbing sharply 24% who have not paid in past 2 years have still not being foreclosed. Even when payments are cut 50% or more half still default wi 12 mo. The real driver is being underwater. Americans essentially pocketed $2 trillion and are now walking.
If prices drop more will go underwater Second liens are also a big problem. $842 billion in second mortgages are owned by the big 4 banks. Many Americans are not making their average $1200 first mtg payment but are paying $150 on their seconds making the banks holding seconds and first reluctant to foreclose.