And here's more:
The percentage of mortgages in default rose to 2.87%, surpassing the worst levels following the 2001 recession.
"The news is unremittingly bad," CNBC's Steve Liesman said Tuesday. "Delinquency rates were up in 44 of the 50 states."
The only states where delinquencies didn’t increase were Kansas, Kentucky, Montana, North Dakota, South Carolina and Utah.
The states with the highest delinquency rates are:
West Virginia, 3.83%
Let's put that picture in perspective.
In 2001 we were in a recession. According to the National Bureau of Economic Research the US economy was in a recession from March to November 2001. Rising foreclosures are a natural consequence of a recession. However, now we are in an expansion, albeit it a slower one. To hit record foreclosures in an expansion indicates there is a big problem somewhere.
During the first quarter, foreclosures have jumped sharply across the nation’s top urban markets, according to a PropertyShark.com report released to CNBC.
In Miami, foreclosures are up nearly 31%, in Los Angeles 24%, and in New York City, up 56%, the website said. Properties in the borough of Queens accounted for the bulk of the New York foreclosures, jumping 91% alone.
Miami experienced the highest quarterly foreclosure rate per household. In Miami-Dade County, there were 987 residential auctions in the first quarter, which translates into 127 foreclosures per 1,000 households. Miami typically has foreclosure rates higher than the national average because it attracts investors that buy into properties before they’re developed with hopes of flipping them later at a profit.
Let's add some more statistics that indicate these problems are occurring an an economically significant time.
According to the BLS unemployment is at 4.4%. That should mean people have plenty of money. And in fact according to the BEA national disposable income actually rose last year, indicating people do have a bit more money.
So what's the problem? Here it is in a nutshell:
Over the last 5 years, the percentage of higher risk loans underwriting on a yearly basis has been increasing. Simply put, it looks as though some of those loans were poorly underwritten -- at best.
There is no way to simply erase all of these loans. We have to let the market run it's course. That means this problem is going to be with us for some time.