Housing Update: 1 in 7 home loans now in default or foreclosure (14.69%), 4.3 million units in shadow inventory and purchase applications plunged 27%, lowest level in 13 yrs, but don’t worry! Tim Geithner says Euro Debt crisis could never happen here…

And the hits just keep on comin’ in housing…

Calculated Risk is covering all the bases:

Details from the MBA conference call on the Q1 delinquency RECORD, highlights include:

  • FHA foreclosure starts up sharply.
  • “Shadow inventory” of 4.3 million loans that need to worked through (90 day delinquent or in foreclosure) – or they will become REOs or distressed sales.
  • Prime fixed rate is now the key problem!
  • “Sand states” will not be as dominant as the problem moves to prime fixed rate.
  • On the horror show that is the purchase application drop (just like Cash for Clunkers, they cannibalized future sales):

    The MBA reports: Mortgage Purchase Applications Plummet While Refinance Applications Increase in Latest MBA Weekly Survey

    …The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997.

    (more…)

    May 19, 2010. Tags: , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

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