Friday, April 24, 2009

Lest Anyone Think The Recovery Has Begun

Mish has some very dismal news regarding home foreclosures at his blog. He quotes Bloomberg, which says:

Fannie Mae and Freddie Mac mortgage delinquencies among the most creditworthy homeowners rose 50 percent in a month as borrowers said drops in income or too much debt caused them to fall behind, according to data from federal regulators.

The number of so-called prime borrowers at least 60 days behind on mortgages owned or guaranteed by the companies rose to 743,686 in January, from 497,131 in December, and is almost double the total for October, the Federal Housing Finance Agency said in a report to Congress today.

Of all borrowers who ended up in default, 34 percent told Fannie and Freddie they were earning less money, about 20 percent cited excessive debt as a reason for missing mortgage payments, and 8.1 percent blamed unemployment, FHFA said.

Read the whole article, as it is clear the recovery is far from over. The delinquency rate for all mortgages is still increasing. How can a recovery happen while an increasing number of homeowners are deliquent on payments?

I fully expect this recession (or depression) to persist for at least another year while foreclosures begin to settle down. And if things go as badly as I think they will, the market's eventual recovery will begin right as President Obama's disastrous policies take hold and inflation begins to spiral out of the Fed's control. Hurray for Obama!

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