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3 million bad letters on the way

Steve Henn Sep 18, 2007

TEXT OF STORY

Scott Jagow: I hate to go on about this, other shoes are dropping. Today, two more lenders threw up the white flag. Impac Mortgage Holdings said they’re about done with lending. They fired 144 people. Plus, Accredited Home Lenders said they’re not sure if they’re going to survive at all.

And let’s not forget about the people losing their homes. There’s a new report about that this morning as well. Here’s Steve Henn.


Steve Henn: RealtyTrac has a massive nationwide database of foreclosure filings. Before someone loses their house, they’ll get a default notice and several other letters letting them know they’re in serious trouble.

From August 2006 to August of this year, the number of these letters going out shot up 115 percent. Last month, almost a quarter of a million foreclosure filings were sent.

And Tom LaMalfa, who follows the mortgage industry for Wholesale Access, says this just the beginning. He expects more than 3 million people to lose their homes before it’s all over.

Tom LaMalfa: Now we’re beginning to see this hit the markets, where all of the funky mortgage instruments were originated.

State’s like Nevada, California and Florida now have among the highest foreclosure filing rates in the country. All of these states have strong economies, but were also hot spots for so-called innovative home financing.

In Washington, I’m Steve Henn for Marketplace.

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