The rising interest rates are forcing more and more homeowners to default on their mortgages and go into foreclosure according to the the Chicago Tribune today. Those in the midwest are being hit the hardest by the trend. If you are holding an adjustable rate mortgage you are looking at a huge increase in the cost of housing as your grace period expires and the mortgage starts adjusting.
Foreclosures across the U.S. have been hovering near historically low levels, as home prices have risen nearly 50 percent in five years. This appreciation enabled troubled borrowers to sell their homes relatively easily to resolve mortgage difficulties.
Now, a survey of the latest data confirms, that’s starting to change, with an uptick across the U.S. in foreclosure rates and late mortgage payments. But even the new higher rates of foreclosure and delinquencies are low in historical terms.
Nationally, the number of mortgage loans that entered some stage of foreclosure rose to 117,259 in February, up 68 percent from the same month a year ago, according to RealtyTrac, an online foreclosure data service in Irvine, Calif.
Delinquencies are up as well. Data provider LoanPerformance, a subsidiary of First American Real Estate Solutions, has reported that 3 percent of the most vulnerable loans, those made to borrowers with less than a stellar credit history, were 90 days delinquent in February. That’s up from 2.84 percent in February 2005.
Meanwhile, 90-day delinquencies for loans made to borrowers with better credit rose to 0.76 percent in February from 0.67 percent in the same month of 2005. via Chicago Tribune
