ShareThisForeclosures are up. House prices are down. Mortgages may be toxic. But just how bad is the current housing crisis, really? And should you be worried about your own situation?The current trends, which include significant jumps in the numbers of foreclosures and overdue mortgage payments, certainly aren't pretty, though finding accurate and useful numbers is a challenge.More than 1.28 million properties were the subject of some 2.2 million foreclosure notices in 2007, according to RealtyTrac, an online marketplace for foreclosure properties. Those filings affected only 1 percent of the nation's households, but the 2007 total increased a whopping 79 percent compared with 2006.Loan delinquencies also rose steadily throughout 2006 and 2007, according to LoanPerformance, a unit of First American CoreLogic. In November 2007, the most recent month for which data were available, more than 25 percent of borrowers who had a subprime interest-only, payment-option or negative amortization type of loan were more than 60 days late on their payments. More than 21 percent of borrowers who had a traditional 30-year fixed-rate or similar type of subprime loan were more than 60 days late as well. Not all "60-day lates" result in foreclosure, but overdue payments certainly suggest homeowners are overextended.These scary-sounding statistics don't tell the whole story, however.Nationally, even 1.2 million foreclosures, if that many occurred, would represent less than 1 percent of U.S. households, which number approximately 128 million, according to the U.S. Census Bureau.More than 60 percent of households didn't have a mortgage in 2000, also according to the Census Bureau. Of those, 35 million were mortgageless because they were renters; another 26 million owned their own home outright. None of those folks were in danger of losing their homes to foreclosure.Another potentially worrisome figure is the number of adjustable-rate mortgages that are expected to reset to higher payments, which may be unaffordable for those borrowers, in 2008 and 2009.Approximately 51 million mortgages were outstanding in the United States at the end of 2006, again according to the Census Bureau. LoanPerformance recently tracked approximately 5 million ARMs, and found that 1.3 million, or 35 percent, of the 3.7 million prime ARMs, and 2 million, or 92 percent, of the 2.1 million subprime ARMs were scheduled to reset this year or next year. That 92 percent sounds like a big number, but the total number of ARM resets amounts to 3.3 million loans, or 2.6 percent of U.S. households.Further, national numbers tend to mask regional variations, which show that homeowners in some cities have suffered far more than homeowners in other cities have. That's the case because real-estate markets are highly localized, says Rick Sharga, vice president of marketing at RealtyTrac in Irvine, Calif."Even in states with high foreclosure rates and real-estate values falling through the floor, you are going to find pockets, neighborhoods, where things are fine," he says. RealtyTrac recently ranked 100 metropolitan areas in terms of the percentage of households that entered some stage of foreclosure in 2007.At the top of the list were six areas where 3 percent to 5 percent of households had experienced foreclosure-related activity: the Detroit metro area; Stockton, Calif.; Las Vegas; Riverside-San Bernardino, Calif.; Sacramento, Calif., and the Cleveland metro area.At the bottom of the list were six smaller areas where less than 0.2 percent of the households experienced foreclosure-related activity in 2007: Richmond, Va.; the Allentown, Pa., metro area; Honolulu; McAllen, Texas; Syracuse, N.Y., and Greenville, S.C.What's more, the underlying causes of housing-market distress differed even among the most harshly impacted states, according to CoreLogic's January 2008 forecast of U.S. residential mortgage risk.In California, the primary factors were "significant declines in home prices, increasing foreclosure rates, a relatively high proportion of nonconforming Alt-A and subprime adjustable-rate mortgages, low housing affordability and investor speculation that boosted housing demand."But in Michigan, "persistent economic distress and a high incidence of mortgage fraud" were at work, according to the forecast.The best advice has been stated and restated, yet remains good advice nonetheless. If you have an adjustable-rate mortgage, find out how much you owe, when your interest rate will reset and how much your new payments will be. If you won't be able to afford those payments, contact your lender as soon as possible to discuss any other options that may be open to you."Act before you find yourself delinquent," Sharga says. "If you wait until you are in trouble, it may be too late."X...X...XThe benchmark 30-year fixed-rate mortgage rose 41 basis points, to 6.37 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.4 discount and origination points. One year ago, the mortgage index was 6.29 percent; four weeks ago, it was 5.57 percent. The 30-year fixed hasn't been this high since the middle of October, when it was near 6.5 percent.The benchmark 15-year fixed-rate mortgage rose 41 basis points, to 5.87 percent. The benchmark 5/1 adjustable-rate mortgage rose 27 basis points, to 5.77 percent, and the 30-year fixed jumbo, for loans of more than $417,000, went up 39 basis points, to 7.55 percent.(Distributed by Scripps Howard News Service. E-mail Holden Lewis at hlewis(at)bankrate.com)
Those scary-sounding housing stats don't tell the whole story
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