Notes and Opinions from one of Arizona's Most Trusted Loan Teams

In all the hype about the mortgage crisis and the so-called recession, this headline never gets seen. The Federal National Mortgage Association reports that only 1.15% of their $767 BILLION in mortgages are late.

This means that 98.85% of their homeowners are paying on time. Somehow, this gets lost in the news headlines screaming that we are all going to lose our houses.

Foreclosure can be a devastating blow to a family, but we know that a lot of the current crisis involves homes that were bought for investment purposes, not as a primary residence. In Arizona, the AAR reported that 1 in every 4 houses bought during the "boom" years was bought by an investor. Those investors who were caught when the market cooled off have walked away from these homes in record numbers. We don't feel sorry for them.

A number of regular folks have lost there jobs and are facing the loss of their house as a result. This is always sad, but it is unfortunately very common every time there is a downturn in the economy. Others have had job transfers that forced them to sell their home in a market that would not cover what they had paid. If they owed more than the house would sell for, they also walked away.

In our 25+ years in the business, the number one cause of foreclosures is actually divorce. Since it normally takes two incomes to afford a home, breaking up the marriage frequently cripples the ability and willingness to make the mortgage payments.

What we are really seeing today is a "perfect storm" of conditions causing a higher than normal foreclosure rate. The usual problems caused by death, divorce, and job loss have been magnified by declining home prices. In the past, many of the people affected by these issues would have quickly sold the house. Now days, that's not so easy to do.

The banks need to help those people who have been hurt through no fault of their own, just like they have always tried to do. Make no mistake, the mortgage company wants your payments, not your house.

Investors who missed the market should be allowed to fail.