What are the predictors of foreclosure rates?

I'm trying to ascertain for myself the depth of this housing crisis that we're in. I'd like to predict the foreclosure rate in the USA. However, I would also need the other informations:

  1. What has been the historical foreclosure rate?
  2. What are predictors of the foreclosure rates? I would think that it's a function of: 1) The "spike" that an ARM resets at. 2) The percentage of people on sub-prime loans.
  3. Regarding the sub-prime mortgages: What portion of them default now and historically?
Reply to
2.7182818284590...
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2.7182818284590... wrote

That is impossible with as unusual a situation as the current one.

There is no nice tidy rate.

The economy tanking and a significant drop in house prices.

Not necessarily, most obviously when the economy is booming and anyone who wants to can flip the property or just refinance before the interest rate jumps from the sucker rate.

Again, that varys dramatically with the state of the economy.

sub prime doesnt necessarily mean forclosure if the economy is booming.

historically?

Again, there are no nice tidy numbers, particularly when the definition of sub prime varys.

Reply to
Rod Speed

"2.7182818284590..." wrote

There are a multitude of issues that come into play right now. Among those are the adjustable rates, but the key factor is the decline in values - which is the public's perception of "worth" of any asset, be it your house or some fractional share of a company. Makes you wonder what came first, the default in home loans or the public going "I ain't poaying THAT for your house!!". If you could still buy a house for $149,950 and sell it in two years (or less) for $225,900, it doesn't matter that you have an ARM resetting to 18.3%, you've sold that sucker and moved on to another.

Given that the so-called "sub-prime" mortgages are relatively new, we're still drawing the chart on their history. BTW: It ain't looking all that good.

Reply to
Paul Thomas, CPA

"phil scott" wrote

No. I wasn't. Except to adavocate selling if the offer was high enough regardless of the tax impact.

Yup. It's a great time to be a buyer.

For those who are able - and plan to use the property - it's a great time to buy. Just utilize all those things that many have called "old school". Location, location and location. It's still important as it ever was.

Reply to
Paul Thomas, CPA

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