Going on five years into our foreclosure disaster, a major report is now authoritatively giving us that sobering news.
The Center for Responsible Lending (CRL) is a respected non-partisan research and policy organization with the mission of “protecting homeownership and family wealth by working to eliminate abusive financial practices.” In mid-November it released the results of its comprehensive analysis of foreclosures called Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures. This study reviewed and tabulated 27 million mortgages originated from 2004 and 2008, and looked at the borrowers’ performance on those loans through last February. As its title signals, the study addresses at how different socio-economic groups, different parts of the country, and different racial groups have been affected by the flood of foreclosures. Its findings contain a number of meaningful surprises, which I’ll tell you about some other time. But its first finding—that we’re not even halfway through these foreclosures—is what most caught my attention.
The analysis shows that of all mortgages entered into from 2004 through 2008, at least 2.7 million of them have been gone all the way through to completed foreclosure. This is about 6.4 percent of all mortgages entered into during that period of time. And this 2.7 million does not include foreclosures that have occurred in these last few years on earlier mortgages, those entered into before 2004.
Of this same set of 2004-2008 mortgages, another 3.6 million households are “at immediate, serious risk of losing their homes.” The study defined this category as those mortgages already in the midst of the foreclosure process, or more than 60 days delinquent. Not all of these will result in completed foreclosures, but a large percentage likely will.
So, about 2.7 million foreclosed, 3.6 million to go.
It’s important to realize that this 3.6 million in seriously troubled mortgages does NOT include other troubled mortgages which originated outside the 2004-2008 period, nor those which are performing decently now but will nevertheless go to foreclosure in the near future because of new unemployment, etc. So it is very likely that there will be more than that 3.6 million number.
I realize that for many people, this constant talk about foreclosures gets tiring, frustrating, even maddening. Unless you are dealing with a foreclosure yourself, or are close to someone who is, it’s one of those things that’s in the news so much, year after year, that the stories start sounding the same so you start tuning it out.
But I can’t tune it out. I don’t want to tune it out. Much of my job is to listen attentively to those stories, told to me virtually every day by hard-working men and women who are fighting to save their family home, their place of shelter and stability and dignity. Behind every single foreclosure, and every threatened foreclosure, there is a very human story. Some of the stories are rather straightforward, but most are messy. Human beings being who we are, our lives don’t tend to travel down a neat and tidy path. My job is to take your financial story, lay out your options, and help you chose among them to get to the best place you can get to. Including with your home.
The country is nowhere close to working through its foreclosure epidemic. But let me help you get through your own personal part of it.