“The subprime mortgage market still is getting worse each month, but there are some indications that the massive problem of borrowers falling behind on their loans may be moderating.
Data provided recently to holders of securities backed by subprime mortgages showed that the number of borrowers who were delinquent on their home loans rose at a slower pace in April than in March. It was the third month in a row in which mortgages went bad at a slower rate.
…While it is hard to predict when the subprime market will hit bottom, some analysts think the recent data indicate that some sort of stabilization is under way.
“The trajectory is beginning to flatten out, and this could be a turning point for prices” of mortgage securities, said Glenn Schultz, a senior analyst at Wachovia. As many poorly underwritten subprime loans made between mid-2005 and mid-2007 go bad early in their lives, Mr. Schultz expects the remaining loans to perform more normally.”
[SOURCE: Wall Street Journal]
This news does point towards a slowing foreclosure rate in the future, but foreclosures usually lag 4-6 months behind mortgage payer delinquency. I believe that this summer will see the most foreclosures in Tennessee in recent history and that stabilization will not return to the immediate Nashville area until the beginning of 2009.
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