Foreclosures Rate Surges to 2.9%

123jump.com Staff
30 Jun, 2009
New York City

The U.S. government reported that foreclosures in process jumped sharply among prime borrowers despite a rise in loan modification program. Prime loan foreclosure rate jumped to 2.9%. Consumer confidence declined in June. Home price index in metro area dropped 18.1% in April.

[R]11:00 AM New York – Investors remain focused on the housing market. The government reported that foreclosures in process jumped sharply among prime borrowers despite a rise in loan modification program. Prime loan foreclosure rate jumped to 2.9%. Consumer confidence also declined in June. Home price index in metro areas decreased 18.1% in April.[/R]

The Office of the Comptroller of the Currency and the Office of Thrift Supervision in a joint report said that in the first quarter 2009, foreclosures on all outstanding prime loans increased to 2.9%. The prime mortgages represent two thirds of all mortgage loans.

The foreclosure rate in the first quarter on all loans increased to 2.5% to 844,389 which is 22% increase from the previous quarter and 73% higher from a year ago.

Loan modification in the quarter also jumped 55% from the previous quarter to 185,156. This is also 172% higher from a year ago.

Consumer sentiment index June declined as job losses mount and home prices remained weak in the month. The consumers are increasingly looking for ways to cut spending and save their hard earned money.

The index in June fell to 49.3 from revised 54.8 in May by the Conference Board.

The home price index for 20 largest metros, S&P/Case-Shiller index decreased 18.1% in April from a year ago after dropping 18.7% in March. Price declines were most severe in Phoenix with 35% fall followed by Las Vegas with 32% drop and San Francisco with 28%.

Distressed sales in California, Las Vegas and Arizona and Florida are driving the home prices lower. California in distress home sales reached peak of 51% of existing homes sold in May according to data published by MDA Data Quick.

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