2002 Mortgage Foreclosures vs 2008

[Citizen Number 9]

Foreclosures at Record High
Risky loans, marginal buyers drive rising delinquencies

By Steve Kerch, CBS.MarketWatch.com
Last update: 6:26 p.m. EDT Sept. 9, 2002

WASHINGTON (CBS.MW) -- The number of mortgage loans entering foreclosure and those somewhere in the process hit record levels in the second quarter, a mortgage trade group says.
The mortgage delinquency rate -- the percent of homeowners at least 30 days behind on payments -- also rose in the quarter, the Mortgage Bankers Association of America reported Monday.
"There is an unprecedented amount of debt that people are putting on their houses," said Gary Gordon, a mortgage-finance analyst with UBS Warburg. "They are running down their savings. It's akin to taking money out of a 401(k) or borrowing against Social Security."
At the end of June, foreclosure proceedings were started on 0.4 percent of all mortgages and 1.23 percent of mortgages were somewhere in the process. Both figures, the highest since the MBA began tracking them in 1972, stem from the growth of low down-payment mortgages and loans to less creditworthy borrowers since the 1990-91 recession, experts said.


As a comparison, data from the end of the third quarter shows a foreclosure rate of 2.97%. I am sure that is now nearing triple the 2002 rate reported here.

Just for interest, the Delinquency Rate, which is mortgages with at least one payment past due, is 6.99%

The most interesting thing is the industry comments on the spike in 2002. It appears to be the same things that caused the recent meltdown.

Why didn't anyone take notice then?