Center of Responsible Lending  compliled a report – “Lost Ground, 2011”. It  is based on an analysis of 27 million mortgages made over a five-year period. Here are our top-line findings:

The nation is not even halfway through the foreclosure crisis. 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk.

Foreclosure patterns are strongly linked with patterns of risky lending. Foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash.

The majority of people affected by foreclosures have been white families. However, borrowers of color are more than twice as likely to lose their home as white households.

To read a full report go to Lost Ground 2011.

These Are The National REO Statistics:
 1,600,000 Homes are currently owned by Lenders/Banks
 3,600,000  Mortgages are delinquent and at risk of foreclosure
 14,000,000  Mortgages are at 125%  or greater LTV than the
                      actual home values

I hope it is just the holiday season. The latest weekley survey by Mortgage bankers association.

This article by CNBC is rather optimistic. I wish we were on the road of recovery by 2013. “U.S. home prices will stagnate through next year and only start recovering in 2013, according to economists polled by Reuters who also felt the stimulus options being floated will not do much to reinvigorate the market.”

But there are two issues that we are dealing with. The first: all the “shadow” inventory has to be cleared out. Which will happen eventually in a year or two. “Unfortunately, a sustained improvement in housing will not likely get underway until the mountain of foreclosures is cleared and the price discovery process plays out.”

The second: there are a lot of underwater houses that people are making regular payments on, they are not behind on their mortgage, the owners are planning to hold on. .”What is going to happen to those? How much time will it take for those houses to get to market value and then some? This issue is not typically discussed, talking about foreclosures and bank owned properties has a more dramatic effect. But this fifth column of upside down houses with on time mortgages will require a lot of attention and soon if we want to recover in 2013.  “Advocates say it’s the only way to head off another wave of foreclosures by keeping underwater borrowers in their homes and will speed up the recovery. Seven economists said house prices would not recover without a writedown plan.

“Unless there is principal reduction, the only cure for the housing market is time — lots of it,” said Paul Dales, senior U.S. economist at Capital Economics. “It will take years of modest house price appreciation for households to climb out of negative equity. Until that happens, demand will remain weak.”

“Eighteen economists said they see prices bottoming in 2012, with 12 of those expecting it will happen in the first half of the year. Just one economist each said a bottom won’t be found until 2013 and 2014, while 7 said it has already happened” read more..

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