Bloomberg reality-checks the real estate and financial sectors by noting that foreclosures have topped 300,000 nationally for six months running. This has banks like, oh, Bank of America and Wells Fargo scrambling to redo loans in California, Nevada, and Florida before any more deals go bad. BofA re-wrote almost 60K loans last month, Wells just over 33K.
Will that be enough? Not if unemployment lingers in the double-digits in many of these once booming areas. As we’ve said over and over, without income paying a mortgage is not possible. Toss in the 2.8 million interest-only loans out there, about to reset to interest and principal, and you add thousands of additional loans which are destined to go bad due to insufficient income.
But by all means, keep telling yourself that things are looking up.
