It's difficult to imagine some on the other side still believe the system is fine and that we don't need any regulations. What are they thinking? The important question is whether this increase and the increases that are coming have been reflected in the banking stress tests. History says no but maybe Geithner will have surprised everyone and made sure the banks have enough padding to withstand the bumpy ride ahead. Reuters:
"We clearly haven't hit the top yet in terms of delinquencies or the bottom of the housing market," Jay Brinkmann, the association's chief economist, said in an interview.
Prime fixed-rate loans, made to borrowers with high credit quality, comprise 65 percent of the $9.9 trillion in outstanding first mortgages, according to the industry group.
"The housing market depends on the employment situation," he said, "and we don't expect unemployment to bottom out until the middle of next year, so then normally housing would not recover until after employment recovers."
A record 12.07 percent of loans on one-to-four unit residences were at least one payment past due or in the foreclosure process in the first quarter, on a non-seasonally adjusted basis.
Foreclosure actions were started on an all-time high 1.37 percent of first mortgages in the quarter, a record increase from 1.08 percent the prior quarter.
