Foreclosures Hit Record Levels in June...

adding more evidence to my post earlier this week that we will soon be entering a period of a massive bulging in bank-owned homes, the majority of which will be the larger, more expensive and harder to sell McMansions:

"prime jumbo mortgages continue to fare the worst, comparatively: foreclosures among good-credit borrowers with high loan balances are up a whopping 580% since Jan. 2008, LPS said."

The national foreclosure inventory rate was 2.86%, up from 2.5% last month, and up a whopping 86.1% from last June. It is becoming more clear that the trend in troubled prime mortgages is getting worse. Here is a link to the article:

http://www.housingwire.com/2009/07/29/report-foreclosure-inventory-hits-record-level-in-june/

Please note that, in an attempt to find a possible green shoot in the housing market, the authors of this article have borrowed a high-powered microscope with which to examine the cesspool and have decided that a one-month data sample showing that fewer borrowers appear to be going delinquent on their mortgages. Don't be fooled: that's not a green shoot - it's not even a speck of algae.

I know for a fact that banks are giving delinquent borrowers a lot more time to "cure" their delinquency because 1) the foreclosure processing pipeline is hugely backed up AND over the short-term, it makes bank balance sheets look healthier when they report lower delinquencies, so they tend to delay declaring mortgages delinquent.

I have a friend on the east coast who knows a CPA with several previously high income clients who have lost their jobs, have not made mortgage payments for months and yet have not heard anything from their banks. Those are an example of mortgages that should be declared delinquent but have not been yet. There also have been several recent articles in the media alluding to this phenomenon of banks delaying delinquency notices.