INDUSTRY OVERVIEW

HIGH DEMAND! Millions in Foreclosure and Mortgage Delinquency.

Foreclosures and mortgage delinquencies are at an all time high and number in the millions. U.S. homeowners are losing their homes at record rates with no end in sight. The experts predict this is only the tip of the iceberg - in the next few years this epidemic will increase five-to-tenfold.

14.78% OF MORTGAGES PAST DUE - 8.58% IN FORECLOSURE.

"In a clear sign of serious unfolding problems, the Mortgage Banking Association (MBA) survey reports that 12% of Federal Housing Administration (FHA) loans are either in foreclosure or delinquent. The delinquency and foreclosure numbers are quite alarming and indicative (along with FHA data) of fundamental systemic lending shortcomings.

Housing Groups Told Congress, "With no cash reserves, too many households are already just one paycheck away from financial disaster. FHA foreclosures are at record levels and are still climbing. As one local advocate put it, 'this is the worst time for foreclosures basically since the Great Depression."

FOR THE NATION OVERALL, 14.78% OF CONVENTIONAL SUB-PRIME MORTGAGES WERE PAST DUE, WITH 8.58% IN FORECLOSURE! Some of the worst performing states in terms of total delinquencies include Pennsylvania (17.19%), Indiana (17.16%), Michigan (16.84%), Ohio (16.52%), Iowa (17.3%), Missouri (17.09%), Georgia (16.45%), North Carolina (19.54%), South Carolina (23.12%), West Virginia (17.36%), Alabama (19.76%), Mississippi (23.66%), Arkansas (17.21%), Louisiana (20.64%), Oklahoma (17.04%), Texas (16.45%), and New Mexico (19.05%)." As reported by the Mortgage Banking Association.

A Record Number Lose Their Homes It was recently reported that in Philadelphia a group that includes the sheriff is trying to suspend the city's foreclosure auctions because hundreds of people are losing their homes every week. About 800 people lose their homes in Philadelphia every month. "It's the biggest number we've ever seen," said John Dodds, director of the Philadelphia Unemployment Project. "With a 7.9% unemployment rate in this city, we have a record number of families losing their homes every month."

AND THIS IS JUST ONE CITY!!

So why are there so many homeowners delinquent on their mortgages? Real simple - people already live paycheck to paycheck; then they encounter unforeseen circumstances that affect their ability to pay a mortgage in a timely manner. The Mortgage Industry defines these situations as 'Hardship Conditions': Temporary job loss; medical illness or injury; marital difficulties; unforeseen repairs or high utility rates; tenant problems; even a death in the family. Just one of these situations can have a direct bearing on making home mortgage payments.

Once an individual misses two or more mortgage payments, the mortgage company (lender or investor) starts calling. If the hardship continues for 2-3 months, the communication channel breaks down - either the homeowner stops answering the calls, or the lender stops calling. Next stop? FORECLOSURE.