It sounds so easy to blow off "less than 2%" as an insignificant number since there are about 48 Million Home Mortgages in America BUT...This puts that number in a bit of a different perspective.
What this means is that from 2006, when this started to 2009 when the ARM bump from this March finally washes the majority of Foreclosures from the last of the Sub-Prime mess, there will be a projected 5,500,000 Foreclosure actions taken. 2,600,000 have already occurred and there are 20 months to go.
The impact on housing values, tradesmen, entire economies is much more than the "less than 2%" figure that makes it sound like a minor cold. It is a massive failure of the system. And delinquency rates for standard mortgages are not "less than 5%". Mortgage Bankers Association put the end of 2007 number at 5.82% for STANDARD Mortgages and 17.31% for Sub-Prime Mortgages.
Here's the other side of the equation.
From the rough numbers, 5-10% of the foreclosures will be avoided.
Bank of America to Modify Mortgages, Help Homeowners (Update3)
By David Mildenberg and Peter J. Brennan
April 28 (Bloomberg) -- Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, said it will modify at least $40 billion in troubled mortgage loans over the next two years to keep customers in their homes.
The move would help as many as 265,000 homeowners, Liam McGee, president of global consumer and small-business banking, said today in Los Angeles at a U.S. Federal Reserve hearing on the pending purchase. The company is making $2 billion in donations to communities over the next 10 years, including funds for organizations giving advice on foreclosures, he said.
``No one benefits from a foreclosed home,'' McGee said. ``It is bad business for banks.''