Foreclosures Up Again in December

Author:	Lucas Jones
Source:	Homes Discovered
Date:	January 17, 2007

Home owners continue to have trouble making mortgage payments as December foreclosure rates are above the 100,000 point for five straight months.  This is an indicator as to why the realty market has been so weak as of late in Hawaii. Adjustable-rate mortgages, or ARM's, are fueling this wave of foreclosures as people rushed into the frenzy market of a year ago and did anything they could to buy real estate.  Many of those people are paying for it dearly now.  The most devastating factor is the combination of rising interest rates and slow home sales.  People who want to sell cannot and some people simply can no longer afford the new interest rate on their ARM. Many people figured that they would get an ARM and if the market went south, they could just sell and dump that poor mortgage.  They were wrong.  Now there is a glut of homes across the market and interest rates have risen so that too many people want to sell to escape their high mortgage but there isn't enough buyers and they can't sell. Contributing to this trend are the lenders themselves who tried to maintain business in the slower market by relaxing their underwriting standards and approved some buyers who wouldn't normally qualify.

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