Charts: Mass Foreclosures Threaten the U.S.
July 31st, 2007Traders have a word for chart patterns like these: breakout.
Via: Efinance Directory:
Home foreclosure activity continues to soar nationwide over the past year, particularly in the states of Nevada, California, Arizona, and Florida. We’ve compiled a detailed analysis of the foreclosure crisis, including up-to-date graphs depicting recently reported foreclosure activity for these states.
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I’ve mentioned this before, though I don’t think it was on this site:
It’s my understand that all mortgage loans include a clause that allows the lender to go after the seller, should the buyer default.
I remember this clause in the first mortgage agreement I ever signed, and I was concerned about it. I mean, what if I decided to sell and move to better digs? I could get stuck paying off two mortgages.
A couple of years ago, a banker told me that all mortgages contain such a clause.
In the real world, I’ve never heard of a lender coming back on a seller after a foreclosure. But in the past there was never any incentive to do so. The house could always be sold to someone else to cover any deficiency.
Sure, there have been instances of falling house prices in the past–but this round promises to be pretty bad, and pretty long-lived.
If lenders did go after sellers, the people in the deepest trouble would be the “flippers”–the ones who moved four or five times in two years to cash in on rising home prices.
I’m also wondering if developers who built large tracts are vulnerable to this.
I haven’t heard anyone bring up this issue. And, in reality, there may not be any cause for alarm. If lenders did decided to come back on sellers, they would almost certainly find that they couldn’t get blood out of a turnip, that the sellers are broke and over-extended.
Has anyone thought about this?
I don’t think “ruining your credit” is nearly as bad as people think it is: “Oh Heavens, we won’t be able to borrow, whatever will we do!!” People are falling over each other to lend money, so you can ALWAYS borrow, you just may have to pay a little higher interest rate. I think, with the way things are going, pretty soon a majority of us will have bad credit, so your credit rating is going to matter less and less.