In today's installment of terrible-but-predictable housing-market news, mortgage foreclosures set yet another record. The Mortgage Bankers Association (MBA) noted a 1.4% foreclosure rate for the second quarter of 2007, a major jump of 41 basis points (almost half a percentage point) over the prior-year quarter.
Making matters worse, the 5.12% delinquency rate was up 73 basis points from a year ago. The numbers are juiced by major problems in a few select states, but oddly enough, they're not just the ones we typically identify with the bubble. Sure, California, Nevada, Arizona, and Florida -- scenes of some of the worst bubble excesses -- are leading the way. But the major problems in states like Ohio, Illinois, and Indiana prove that the housing mania's inevitable backlash is hurting Americans all over.
No wonder the Fed this week begged mortgage-backed-asset bagholders and bill collectors to work with indebted home buyers.
In completely, utterly unrelated news (I'm sure of it), Countrywide Financial (NYSE:CFC) joins NovaStar Financial (NYSE:NFI) in firing another pile of mortgage workers. Will Countrywide join defunct lender Novastar in Wall Street's dustbin, too? Or will deep-pocketed buddies like Bank of America (NYSE:BAC) offer further rescues? Will the money even matter if homebuying returns to rational levels?
