Why are US foreclosures hitting record highs in this "booming" economy?
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That is quantitative. There are very few where I live. But in California the record was set because people will, at first, willing to pay $450,000 for a two bedroom one bath. Then came the proliferation of second mortgages and the people took more loans, paid off credit cards etc, and then charged them back up again, eventually they were overwhelmed. Not just California, it happened in a lot of places. Easy credit and willing lenders.
In areas of high unemployment and government giveaways you will see this a lot.
Personally, I am better off then I have ever been.
Simply stated: Anyone who says the economy is "booming" is a retard.
Because Americans are not financially responsible as a whole! Look at the amount of credit card debt and people living well beyond what they can actually afford!
Foreclosures are about people making decisions that they shouldn't. Foreclosures are about lenders making bad decisions. They have less to do with the economy than you think.
Because a booming economy doesn't require ALL of its markets to flourish in order to BE a booming market. Thank the Fed for the unprecedented housing boom and subsequent cool off. That's what happens when a small group of people control the entire market's interest rates.
Banks gave people to much credit..good credit or bad credit...people with scores of 525 are getting mortages and now a lot of those people are defaulting. Don't forget the cost of living has gone up also, gas, food, tuition and etc.people are going broke.
What an original question. Didn't we just all answer that genius.
U.S. foreclosures have made several records during Bush's rule. In fact he has set many records, including bankruptcies, several deficit records , college tuition at record high, health care costs at record high, personal debt at record high, the list goes on and on, but I think you get the point.
becasue a bunch of idiots bought houses they could not afford and as usual the dems want to bail people out and reward them for being stupid and irresponsible.
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AGAIN! Thanks for admiting the economy is booming! Want to know why there are so many foreclosures? Because STUPID people who got 5 year interest only loans or option arms are now having to refinance at higher rates. Their $1500 a month house payment just became a $3500 a month house payment! Maybe they should have gone with a 30 year fixed instead!
Because of greed by buyers, investors and lenders.
Investors snapped up houses to flip... Buyers got into homes they could not afford... Lenders gave out interest only loans to people that now can't afford their payments since the principle kicked in..
Greed by all of the above.
Two main reasons:
1. Mortgage fraud
2. People borrowing much more than they could truly afford so they took adjustable rate mortgages which are being reset at higher rates now. Since housing prices have stalled there is no way out for many of those people but foreclosure.
Because many mortgage companies used liberalized laws that allowed the creation of a mortgage product that would allow people with lousy credit to take on debt and buy a house... and (as people with poor credit are wont to do) when they stopped making payments on the homes, those homes went in to foreclosure.
This whole "everyone deserves to be a homeowner" line is crap. Many people just aren't capable of that, and this current market is absoloute proof of that.
Because of poor lending practices a few years ago.
I'm not repeating myself. Go back and read the identical one that was asked five minutes ago...
Big SIGH.
Because those fascist republicans and bankers tried too hard to make money. Now theyd gon and screwed thangs up quite a bit.
Too many people getting way over their head in debt. Too many lenders eager to lend money to people that don't have the means to pay it back, but will pay pure interest for few years than let the bank repo the home.
13211.87988 Dow record high today. I'll bet that just chaps your rear raw, don't it CHI GUY?
because america is 100% tapped out, remortgages over and over to supply an insatiable appetite for nonessential consumables.
we have squeezed the last bit of vital juice out of this country. They have extended the amount of crap you can buy by giving loans they know will not be paid. Artificially inflating housing prices to give the imaginary boom a number to crunch.
boom is the sound of the door slamming,,,,,,,,,and youre stuck outside
oh I dont know
because bush is a meanie ?
and you want baracki to be pwesident ?
Because lenders (banks included) started lowering their standards for borrowing (adjustable rate mortgages), so ANYONE could get a house. People were putting no money down, where as years ago you had to put at least 5-10% down.
Now that the rates and taxes have gone up, their wages don't keep pace, so they can't afford to pay, and lose their houses.
Because as mortgage rates fell to levels not seen for 45 years the price of houses went up and the number of refinances went up. There were waves of refinancing but that began to dwindle. As the mortgage business got competitive the lenders got very "creative" about the terms and started offering loans with no money down and interest-only adjustable rate mortgages. They also lowered their standards for who qualified for a loan. Then a lot of not-too-smart consumers went out and bought houses they could not afford. People who could have bought a $100,000 house with a 30-year fixed mortgage instead took an interest only loan and bought a $200,000 house that they could barely afford the interest payments on. Once rates started back up they could no longer make the payments. The higher interest rates also made it hard for anyone to buy the houses which had their prices inflated as rates fell, so the prices are dropping.
So now you have people unable to make their monthly payments with negative equity in the property so they just stop paying and the lender forecloses. And so what spiralled up begins to spiral down.
The economy is not booming. GDP growth is like 2-3% (don't remember exactly).
Foreclosures are hitting highs becuase foolish borrowers and lenders got into risky loans such as option ARMs and other types of ARMs. They did this becuase they bought over their heads and can't afford the new payments when the arms reset. It is simple lending 101. Don't borrow what you cannot repay.
Instead of people paying down their debt, many squeezed more money out of their properties as housing values went up. So when the market ran out of steam, they are worse off.
Greed
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