Snapshot of a Foreclosure Crisis

Originaly by: Responsible Lending

The magnitude of foreclosures and associated costs are daunting; the numbers tell the story.

1. Number of loans already lost to foreclosure 1.5 million

2. Projected foreclosures on all types of loans during the next 5 years 13 million

3. Portion of all homeowners late on their mortgage 1 in 10

4. Portion of homes where owners owe more than property value Nearly 1 in 5

5. Drop in residential lending from 2008 compared to 2007 Over a trillion

6. Between 2006 and 2008, % decline in existing home sales 24%

7. Between 2006 and 2008, % decline  in new home sales 54%

8. Between 2006 and 2008, % decline in new construction 58%

9. In 2009, number of neighboring homes that will lose property value because of nearby foreclosures 69+ million

10. Average price decline per home (2009) $7,200

11. Total property value lost because of nearby foreclosures (2009) $502 billion

12. Percentage of 2006 subprime loans that went to people who could have qualified for prime loans with better terms 61%

13. Typical rate difference between a 30-year, fixed mortgage and the initial rate of aggressively marketed ARM loans Half to 8/10%

14. Cumulative default rate for recent subprime borrowers with a similar risk profile to borrowers with lower-rate loans More than 3x higher

15. During first four years of a loan, the typical extra cost paid by subprime borrowers who get a loan from a mortgage broker, compared to other borrowers with similar characteristics $5,222