Home foreclosures hit a record high in first-quarter 2007 as more subprime borrowers failed to make their mortgage payments. The number of mortgages entering foreclosure spiked four basis points to 0.58% and over 2.4% of subprime mortgage holders defaulted, up from 2% last quarter, according to a report released yesterday by the Mortgage Bankers Association.
The sluggish pace of the economy is causing real estate values to plummet, making it difficult for mortgage owners who miss payments to sell their homes and stave off foreclosure. The median home price may fall this year for the first time since the Great Depression, says a realty economist. Ohio contributed the biggest share of foreclosures at 1.07%, followed by Indiana and Michigan.