Getting the wrong kind of closure
TEXT OF STORY
Scott Jagow: I wish I could tell you the housing market blues are almost over, but it doesn’t appear that’s the case. We’re only getting foreclosure. The Mortgage Bankers Association says the home foreclosure rate hit a record high for the third quarter in a row. Things are especially bad in Florida, California, Nevada and Arizona. More now from Bob Moon.
Bob Moon: The association says it’s likely the worst is yet to come.
That’s because data released yesterday is for the period that ended just before the recent credit crunch, and that’s made it harder for homeowners to refinance their way out of adjustable rate mortgages.
So the Mortgage Bankers Association is bracing for more defaults. It’s launched a public service ad campaign, urging homeowners in trouble not to wait.
AD: “Don’t be ashamed. Call the people expecting your payment and let them know there’s a problem. Companies want to work with you.”
As bad as it sounds, chief economist Douglas Duncan says he’s not overly alarmed. While nearly 7 percent of Americans are now late with their house payment, he points to the flip side.
Douglas Duncan: That means 93 percent are paying their mortgages on time, and then about 35 percent of people that own a house down even have a mortgage.
Add it all up and Duncan says it equals a relatively small number of American homeowners and, he says, a very small part of the overall economy.
In Los Angeles, I’m Bob Moon for Marketplace.
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