Foreclosures now at record highs

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News item from Bloomberg this morning: ‘The number of Americans who may lose their homes to foreclosure rose to a record in the second quarter, and late payments by sub-prime borrowers surged to one out of every seven loans.’

More: ‘The share of all U.S. mortgages entering foreclosure rose to 0.65% in the second quarter, an all-time high, from 0.58% in 2007’s first three months, the Mortgage Bankers Assn. said in a report today. The number of sub-prime borrowers making late payments rose to 14.82% from 13.77%.’

Our take: We hate to be master of the obvious, but this is very early in the down-cycle for foreclosures to be at a record high; that confirms something we all suspect but that not everyone has admitted yet: This downturn is unprecedented. It is not, as some were insisting this summer, ‘a return to a normal market.’ Record-high foreclosures are not normal.

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Photo Credit: AP
Hat tip: Cal (Sorry, Cal, I wasn’t on the MBA conference call -- It coincided with the kids’ breakfast hour at LA Land global HQ)