This was as of the end of 2007. The foreclosure rate is probably even higher now.
“We’re seeing people give up even before they get to the reset because they couldn’t afford the home in the first place”
Some homebuyers were clueless, and really didn’t understand what they were getting into. Others figured prices would keep rising so they could pull out money or sell the house for more. Or maybe they got hustled by high pressure sleazy mortgage brokers.
Some say the government needs to intervene to save homes that are foreclosing, as was done in the depression, with a moratorium on foreclosures. But if that happens, the mortgage market will dry up, seems to me. Why would anyone fund a mortgage in a time when the government was actively negating the validity of existing mortgages? A moratorium would hurt banks (pass me a hanky, you say?) but that in turn will slow their ability to make loans, which will also hurt the economy.
So what happens to the presumed millions facing foreclosure in 2008?