The big US housing boom really started to dwindle in 2006 and increasing foreclosed news has dominated the media ever since
. Many of today's homeowner's (maybe as much as 10% of them) simply cannot keep up with their payments.
Many of the foreclosed homes are tied to neighborhoods where subprime martgages were widespread. MS Foreclosure for example. Decreasing home values also contributed to the increase in number of these foreclosures. Additionally, state and most local governments were forced to cut back on their spending because the drop in the value of these properties sharply decreased their tax bases.
There were 3 different foreclosure signs that were observed by people involved in the market. First was the bailing out of property owners due to the plummeting prices of real estate. The second sign was all of the sub-prime loans and adjustable rate mortgages beginning to implode. Lastly, the third sign has been the fact that even prime rate loan holders are losing their homes now due to job loss and the economic crisis. Most of them even have good credit ratings. It is expected that unemployment would contribute to almost 60 percent of mortgage defaults. Unfortunately, this means that even more foreclosure news will be heard through the rest of this year.
The New York Times stated in February of 2009 that there are more than 1.5 million prime mortgages alone with delinquent payments (data by First American Core Logic). In that same month, the delinquencies on the even worse off subprime mortgages were as high as 1.65 million. Shockingly over $717 billion in bad loans were on the books for February - up over 60 percent from the same time period a year ago. All of these foreclosures have also dramatically impacted Wall Street and mortgage bonds. These also lead to bank loses of hundreds of billions. (Note: Search on 'forecloser' as well because it is a very common miss-spelling of foreclosure and is prevalent in the foreclosure news posts.)
The Obama administration announced in February that they will be spending $75 billion to save as much as four million homeowners from foreclosures through mortgage incentives and reduced payments. Unfortunately it may take months before anything ever comes of the plan and for many that will be too late. Until that time comes, you will need to brace for the storm and all of the foreclosure news that is still looming out there.