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The Congressional Joint Economic Committee issued a press release last week headed, “All Stakeholders in Subprime Mortgage Mess Must be Responsible for Helping Homeowners and Communities Hit Hardest by Foreclosure”. With some estimates indicating that more than 12% of subprime mortgages in the United States are in foreclosure right now, interest rates continuing to adjust upward, and property values declining dramatically in some areas, there is no question that America is facing a foreclosure crisis.

The press release criticized what it characterized as a White House tendency to blame the homeowners for signing up for deceptive subprime mortgages, and suggested that the federal government coordinate stakeholders to create emergency funds (from public and private sources) to assist families in need in refinincing subprime mortgages.

Although initial projections focused on the ARM adjustments scheduled to take place in 2006–and those dire predictions have largely come to pass–the Joint Economic Committee’s report suggests that subprime foreclosures will continue to increase in 2007 and 2008 as an additional 1.8 million hybrid ARMs adjust upward.

At the same time, home values are declining in many areas, and drastically in some. Arizona home values depreciated by more than 26% from 2005 to 2006, and other areas have seen drops nearly as extreme. Florida, California, Hawaii, and the District of Columbia have all seen property values decline by 15% or more, making both sale and refinancing unrealistic for many homeowners.

This entry was posted on Tuesday, April 17th, 2007 at 9:06 am and is filed under Bankruptcy Law and Bankruptcy Lawyers, Foreclosure Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.