Record Unemployment, Record Foreclosures, Record Bankruptcies

In the first quarter of this year, foreclosure filings were 16% higher than the same quarter in 2009, according to RealtyTrac. And March was the highest month since RealtyTrac began issuing reports.

We were told that the hundreds of billions of stimulus dollars that went to the banks were to stimulate the economy and help hold off in part, the out of control numbers of foreclosures on homes. In Obama’s first year as president, we have seen record unemployment at 10%, record foreclosures and bankruptcies as well. However, the economy has just gotten worse as more and more stimulus money has been spent. And now they are talking about another stimulus program. This is going to continue indefinitely until the dollar becomes worthless.

The number of homeowners losing their homes to foreclosure across the country rose to more than one in every thousand homes being foreclosed. Foreclosures were at record highs in 2009, 21% higher than 2008 and 120% higher than 2007. Why didn’t the several hundred billion stimulus money help stop the foreclosures? The stimulus recovery is not sustainable. It is not working. The next stimulus will not help either.

The upcoming option ARM resets of 2010 and beyond could turn out to be very devastating. According to Fitch Ratings, 94% of option ARM borrowers elected to only make the minimum payments. This will lead to a housing glut, more decreased home values, higher unemployment and the death of the cash-strapped consumer. What do you think will happen to housing when the resets happen? When monthly payments on a $400,000 mortgage jumps from $1,287 to $2,594? Is this similar to your situation?

Higher unemployment will deteriorate any chance of keeping many homeowners from defaulting. These homeowners will find it acceptable and advantageous to strategically default on their house payments, as it just might be more cost effective for them to just walk away.