Negative Media

On Sept. 2007 an article entitled " New Mortgage Foreclosures Set Record", Martin Crutsinger provided the following summary of a speech given by Doug Duncan, the chief economist for the Nat'l. Mortgage Bankers Assn. Here's how it was reported:

" The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages. The MBA reported Thurs, that mortgage holders starting the foreclosure process in April-June quarter reached 0.65%, marking the third consecutive quarter that this figure has set an all-time high.
The delinquency rate has risen to 5.12%...the worsening performance was driven by two factors--heavy losses in the Midwest states and the collapse of previously booming housing markets in CA, FL, NV, AZ...Analysts said the problems in the formerly red hot housing markets of CA, Fl, NV, AZ reflected in part speculators walking away from mortgages they can no longer afford."

This article ends with the negative media's favorite theme for scaring their readers and/or listeners:"Two million people will face foreclosure in the next two years."

Here are the numbers that the negative media did NOT report from Duncan's speech:
1. 35% of the homes in the U.S. do NOT have a mortgage
2. Some 94.88% of the loans ARE performing.
3. The foreclosure problem in this country is really a story about 7 states.
4. The biggest foreclosure problems are in Michigan, Ohio and Indiana. These are manufacturing states that had horrible job losses. Since 2001, Michigan has lost 300,000 jobs. These states probably would have had problems no matter what the market was doing.
5. the other four states-- CA, Fl, NV and AZ experience significant overbuilding. 25% of the foreclosures in these states are on properties that are held by investors who were speculating.
6. In the other 43 states, foreclosures have fallen in 2007 from 2006 (from Michael Clawson, VP, Central Texas Mortgage)



Sun City Palm Desert , on average, is down only 3 1/2 % from Aug thru Oct. 06 and for the same period in 07. We do have several properties in foreclosure--mostly because of speculators.