CT Foreclosure Rates Jump to Highest Levels in Over 30 Years
According to a report Thursday from the Mortgage Bankers Association, Connecticut had 31,979 residential mortgages either in foreclosure or 90 or more days past due. That equates to one mortgage in every 17 or roughly six percent of all CT home loans as of June 30th, 2009. Many economists expect the increase in foreclosures to continue until unemployment rates start to drop. Many are expecting the end of 2010 as the foreclosure bottom.
While the early increases in CT foreclosure rates were primarily from sub-prime mortgages, we are currently seeing more Prime mortgage holders default. This is going to have a big impact over the next year or so as more these prime mortgages head to foreclosure. Families with traditional mortgages who played by the rules and didn't overextend themselves are fueling this trend because of job layoffs.
More and more people in Connecticut are seeing their income levels drop and are no longer able to stay current on their mortgages. Since Connecticut slipped into recession, the state has lost approximately 76,000 jobs. Many expect that number to increase to as many as 100,000 lost jobs over the next year, even though monthly job losses appear to be slowing.
Something to consider is that not all homeowners in foreclosure end up losing their homes. They are able to stop foreclosure with the help of various programs and services that are available to them. Connecticut's foreclosure mediation program, which was started in July 2008 and is administered through the courts, has helped over 2,000 borrowers reach agreements with lenders and loan servicers to stay in their homes. That's 62 percent of the mediation cases closed as of June 30. Out of the 2,000 agreements that were made, approximately 42 percent involved new terms such as lower interest rates.
While that sounds like good news, the mediators aren't seeing any signs that the foreclosure numbers in CT are slowing. In Connecticut, 10.8 percent of all residential loans are over 30 days late or in foreclosure.
