We passed another troubling milestone for the troubled housing market a few months back. Floyd Norris at the NYT notes that the number of initiated foreclosures on prime mortgages has significantly surpassed those for subprime mortgages:
The latest [foreclosure] figures, for July, put the number at 197,000, the highest for any month since they started keeping track in July 2007.
Of those, 105,000 were prime mortgages, and 92,000 subprime. The June [and May] numbers also showed more prime foreclosures initiated.
Of course, the number of prime mortgages is much larger than the number of subprime mortgages, so the overall failure rate for the prime sector remains much lower. But as far as banks are concerned, it’s the number and value of the foreclosures that count…and, by this measure, prime foreclosures are now a more serious problem than subprime.
Data from Hope Now survey on recent months below (See bottom lines: Total loans by category, foreclosures by category, and foreclosures as a percentage of category):
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