Electronic copy available at: http://ssrn.com/abstract=1469749
MORTGAGE ELECTRONIC REGISTRATION SYSTEM
become clear that millions of Americans are not capable of repaying loans craftedfor them by commission hungry brokers, the liquidity of securities drawn fromthose loans froze.
Currently about 25 percent of all subprime home mortgages aredelinquent with millions more likely to follow.
One rating agency predicts thatbetween 40% and 50% of all subprime mortgages originated since 2006 willeventually end in foreclosure.
As the volume of foreclosures increased, it putdownward pressure home prices creating the first decline in the national medianprice for previously owned homes since the Great Depression of the 1930s.
According to one estimate over a quarter of all American households are currentlyhave negative equity—they owe more on their home mortgage than their home isworth.
About half of all subprime borrowers are underwater on their loans.
Thousands of financial “foreclosure rescue” predators and con artists are openlystalking desperate families looking for a financial lifeline.
County and municipalgovernments in the Los Angeles area have begun campaigns to exterminate ascourge of mosquitoes breeding in the rotten water of swimming pools behindthousands of abandoned suburban homes.
In Cleveland, Ohio an estimated15,000 of the area’s 84,000 single-family homes are sitting vacant anddeteriorating intourban blight with squatters and scavengers taking over entireneighborhoods.
America lost friends in places as far off as Norway and Australiawhen municipal pension funds bottomed out on investments in American subprime
IMF Puts Subprime Loss Near $1 Trillion: Economic Damage Equals $143 for Every Person on the Planet,
Trouble at Home Among the 50 States and District of Columbia
, August 21, 2009, at 1; E. Scott Reckard,
State’s Mortgage Woes forecast to Rise: Delinquencies on Loans will continue to Climb through 2009, TransUnionProjects
, August 25, at 2.
Grant Bailey, Vincent Barberio, & Glenn Costello,
Revised Loss Expectations for 2006 and 2007 Subprime Vintage Collateral,
Banks Collect Houses Amid Subprime Fallout
., July 3, 2007, 10.
Jody Shenn, ‘
Underwater’ Mortgages to Hit 48%, Deutsche Bank Says
,Bloomberg.com, August 5, 2009, available at:http://www.bloomberg.com/apps/news?pid=20601110&sid=ac9y1xr7yNhQ.
, CNNMoney.com, August 6, 2009
Foreclosure Rescue Scams Multiply: States, FTC Tackle‘Fraud Virus’ Hitting Some Homeowners
, August 4, 2008, at 3A.
A Magical Misery Tour in Stockton
, December 13,2007, A1; Devid Streitfeld,
Blight Moves in After Foreclosures: Untended Properties Become Eyesores; Then There are the Uninvited Guests: Mosquitoes,Vandals and Squatters
, August 28, 2007, A1.
Foreclosures Force Suburbs to Fight
, March 3, 2007,A1 (“Many of the houses are filled with smelly trash and mattresses used by vagrants. Theyhave been stripped of aluminum siding, appliances, pipes and anything else that scavengerscan sell to scrap dealers.”); Alex Kotlowitz,
All Boarded Up
, March 8, 2009(“The city estimates that 10,000 houses, or 1 in 13, are vacant. The county treasurer says it'smore likely 15,000. Most of the vacant houses are owned by lenders who foreclosed on theproperties and by the wholesalers who are now sweeping in to pick up houses in bulk, as if they were trading in baseball cards.”