Did you know that 323,102 properties nationwide entered some stage of foreclosure in the first quarter of 2006, a 38 percent increase from the previous quarter and a 72 percent increase compared to the first quarter of 2005. Breaking down the nation’s quarterly foreclosure rate of one new foreclosure for every 358 U.S. households was higher than in any quarter of last year.
WOW.... those numbers seem so unbelievably high. But wait..... after determining that foreclosures were on the rise throughout 2006, which would push the nation’s annual foreclosure rate upward, this number was no more than 1 percent of U.S. households. Did I read that right? Just 1 percent? That seems insignificant now. Yes, it's still a problem which stems from so many reasons. But let's look at the total picture.
These figures came from RealtyTrac.
The total picture is homeownership. The AMERICAN DREAM. Rent vs buying. The ability of being proud, having the chance to be a homeowner. As a professional, we need to portray a positive image, not a negative to the general public. We need to educate in regards to both the positive and the negative aspects of owning a home. The media already gives us the negative pictures of failed homeownership. But what about the positives?
- When renting, you are throwing your money out the window. Owning a home is like having a savings account.
- Pride.... it's yours. You can hang a picture where ever you want and not worry about what the landlord would say.
- It's a great chance to make long lasting memories. This post was inspired by Colleen Kulikowski and her contest of What Makes a House a Home.
Who should be at fault for the amount of foreclosures happening today? Where should our focus be in regards to homeownership? Education!!
Subprime mortgages. Sounds like an evil word. Yes and no. There are now studies showing that in the last decade the subprime market has produced over $2 trillion in home loans. Many of these loans were for purchases, resulting in a net homeownership loss.
The graph and some of the data is from TRUE OR FALSE.
History has proven that borrowers with lower incomes and credit that is blemished can be successful homeowners when given mortgages with reasonable terms and fees. HUD and the Federal Housing Administration (FHA) have been great examples of this.
This is not to say that subprime is the route of all evils. It goes hand in hand with those lenders that either ignored the better financing options, those that didn't have access to these types of programs, or those that just didn't educate the consumer in what they were being given as far as the type of mortgage. It's been shown that there were less foreclosures when refinancing into a subprime loan than when buying a home. Why? One reason is that they have less expenses at first than a new homeowner would. Also, in many cases, these homeowners have the experience of owning a home, if the buyer is a first time home buyer.
Overall, I am not putting the blame on just one group. There are many reasons for this so-called epidemic. Again, I just wanted to bring awareness to what we read about, some people making it seem harder than ever to buy a new home. This is the opposite opinion within the mortgage industry with new homeownership on the rise.
UPDATE : As of 6/407 @ 5:15 pm EST -- Here is a link to the most recent foreclosure numbers. It also shows state by state. http://realestate.aol.com/foreclosure stats
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