“that [the foreclosure scandal] is going to lead to a substantial number of foreclosures being permanently forgotten,” Rep. Barney Frank said during Congressional hearings yesterday [reported by the Washington Post].
Strong words from the outgoing chairman of the Financial Services Committee, and even stronger when paired with the new mortgage delinquency numbers. Following are the percentages of mortgages in default and the foreclosure process (from the Mortgage Bankers Association’s National Delinquency Survey):
§ Prime Loans: 9.94%
§ Subprime Loans: 40.29%
§ FHA Loans: 16.44%
§ VA Loans: 9.96%
§ All loans: 13.78%
These numbers are much higher in the hardest hit states of California, Nevada and Florida.
The survey covered 44 million loans, meaning there are more than six million mortgages not being paid in the U.S. today. This means millions of homeowners are looking for answers to their financial challenges … answers that can be provided by educated real estate agents, and increasingly come in the form of a Short Sale mortgage bailout if the homeowner should qualify.
According to CoreLogic, distressed property sales have increased steadily and rapidly over the last few years. In particular, the company reported 60,000 single-family short sales completed in the 2Q 2010, which is a record high.
So, while Citigroup announced it will review about 14,000 foreclosure-related documents, and Bank of America said it will reform its foreclosure process, CDPEs have an opportunity to reach a greater number of distressed homeowners before foreclosure becomes final.