The Portland Press Herald recently reported on the increasing number of home mortgage foreclosures. The article, entiled "Home Credit Crisis Widens" referenced a website by the Mortgage Brokers Association (www.mortgagebankers.org) for the information supporting the article.
The article explained that higher mortgage payments, lower house prices, a weaker job market, and more cautious lenders were the reasons for the increase in mortgage foreclosures. The chief economist at Moody'sEconomy.com, Mark Zandi, said the the increased foreclosures put the possibility of recession at 40%, about 4 times the estimate of recession he estimated before the current credit crisis hit. Foreclosures will peak in 2008, when the "teaser" rates end and the increase of mortgage payments hit many consumers.
Maine's delinquency rate on mortgages is 4.71%, meaning more than 6,500 mortgages are in arrears. Hopefully, predatory lending litigation, combined with Chapter 13 filings, can allow many of these consumers to keep their homes.