Record foreclosures hit mortgage lenders
This story is from USA Today and is related to an earlier blog entry on spiraling mortgage foreclosures. The reason it caught my eye is that no-where in the article does it mention that the top two states where foreclosures occurred are Mississippi and Louisiana, the two states most recently hit – and hit hard – by hurricanes. And the reason people are failing to continue mortgage payments are that in some cases, the houses no longer exist and either they had no insurance, or the insurance company found a way NOT to pay up.
This is a big story – the record foreclosures – and evidence how in every society, when borrowing money becomes too easy, people get hurt.
It is an equally big story when the insurance companies don’t pay up. I have been told by the company insuring my Florida house that they will probably not continue insuring me. It is hard to find a company who will insure your house against hurricane damage in Florida.
By Noelle Knox, USA TODAY
The reason many mortgage lenders are in trouble became alarmingly clear Tuesday. The Mortgage Bankers Association said more than 2.1 million Americans with a home loan missed at least one payment at the end of last year — and the rate of new foreclosures hit a record.
The problem is most severe for borrowers with scuffed credit and adjustable-rate mortgages. More than 14% of them were behind on their payments. And the worst is yet to come, the MBA said. At least $300 billion in subprime ARMs will reset this year to higher interest rates. Those borrowers face higher payments and a harder time refinancing.
Blindsided by the number of loans that have already gone bad, more than two dozen lenders have gone out of business or been purchased. New Century Financial, the nation’s second-largest subprime lender, has quit making loans and is edging toward bankruptcy protection.
“There’s been a stunning erosion of mortgage quality,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s primarily in the subprime market, but the entire market is weakening … and that adds to problems in the housing market, and by extension the broader economy.” Retailers are already feeling the effect, he said, because homeowners tend to spend less when they fear their homes are worth less.
To stem their losses, lenders are ending 100% financing plans, requiring better credit scores and demanding more proof of a borrower’s income. The stricter rules are squeezing first-time buyers, as well as homeowners who want to refinance.
To read the rest of the story, and to see a state-by-state list of mortgage foreclosures, Click USA Today, here.
Report: Humans ‘very likely’ cause global warming
This morning, CNN reports that humans are very likely the cause of global warming. No kidding.
This week, an unexpected storm killed 19 in Central Florida. Global warming is said to be creating stronger, more dangerous hurricanes in the Atlantic. This has had a personal impact on us – we bought a house in Florida this year, only to receive word shortly after buying it that hurricane insurance would be almost impossible to get in the future.
We are planning to make the house as hurricane-survivable as we can, but very little can survive the direct impact of a max force hurricane. It is a terrifying event, and makes a believer out of the non-spiritually oriented.
We really have no idea how far along the process of global warming is, or if it will accellerate beyond our ability to undo the damage we may have done. Or . . . is this just another in a long series of cycles of weather change?
Story Highlights
• Scientists release a 21-page report strongly linking humans to climate change
• Report scientist: Evidence of warming on the planet is unequivocal
• Scientists predict global temperature increases of 3.2-7.1 degrees F by 2100
• Sea levels could rise between 7 and 23 inches by the end of the century
(CNN) — Global warming is here and humans are “very likely” the blame, an international group of scientists meeting in Paris, France, announced Friday.
“The evidence for warming having happened on the planet is unequivocal,” said U.S. government scientist Susan Solomon, who also is a member of the Intergovernmental Panel on Climate Change.
“We can see that in rising air temperatures, we can see it in changes in snow cover in the Northern Hemisphere. We can see it in global sea rise. It’s unequivocal,” she said. (Watch scientist Susan Solomon deliver the grim news on global warming )
In a 21-page report for policymakers, the group of climate experts unanimously linked — with “90 percent” certainty — the increase of average global temperatures since the mid-20th century to the increase of manmade greenhouse gases in the atmosphere.
Fossil fuels like methane and carbon dioxide trap heat near the surface, a process known as the greenhouse effect. The greenhouse effect is a natural phenomenon, but human activities, like the burning of fossil fuels, can pour enormous volumes of these gases into the atmosphere, raising the planet’s temperature and destabilizing the climate. (Watch what happens to our planet when manmade emissions get trapped in the atmosphere )
The report found it was “likely” — “more likely than not” in some cases — that manmade greenhouse gases have contributed to hotter days and nights, and more of them, more killer heat waves than before, heavier rainfall more often, major droughts in more regions, stronger and more frequent cyclones and “increased incidence” of extremely high sea levels.
The report noted that 11 of the last 12 years have ranked among the 12 warmest years on record with the oceans absorbing more than 80 percent of the heat added to the climate system. Add in the melt-off of glaciers and sea ice and sea levels are rising.
The IPCC predicted global temperature increases of 1.8 to 4 degrees Celsius (3.2 to 7.1 degrees Fahrenheit) by 2100 and sea levels to rise between 7 and 23 inches (18 and 58 centimeters) by the end of the century. (Watch how rising sea levels could affect San Francisco )
“An additional 3.9-7.8 inches (10-20 centimeters) are possible if recent, surprising melting of polar ice sheets continues,” the report stated.
The group will meet again in April to discuss the socioeconomic impact of climate change.
Defining ‘likely’
The IPCC was established in 1988 to study climate change information. The group doesn’t do independent research but instead reviews scientific literature from around the world.
The United Nations-sanctioned group was formed by the World Meteorological Organization and U.N. Environment Program.
The group’s goal is to produce “a balanced reporting of existing viewpoints” on the causes of global warming, according to its Web site.
The panel’s reports are influential references for policymakers, scientists and other climate change experts.
Friday’s release is the beginning of the panel’s first major report since 2001. The rest of the report is due out later this year.
The 2001 report found that the 1990s were “very likely” the warmest decade on record. It also said that most of the observed warming over the last 50 years was “likely due to increases in greenhouse gas concentrations due to human activities.”
The authors defined “likely” as between 66 percent to 90 percent probable, and “very likely” as a 90 to 99 percent.
Renewed concern in U.S.
Friday’s report comes amid renewed debate in the United States. (Full story)
In his State of the Union address, President Bush called for the use of more environmentally friendly technologies to “confront the serious challenge of global climate change.”
It was the first time he has discussed the issue in a State of the Union address.
The White House has said Bush’s proposals would stop the growth of carbon dioxide emissions from cars, light trucks and sport utility vehicles within 10 years.
Leaders in the Democratic-controlled House of Representatives and Senate held hearings on climate change this week. (Full story)
CNN’s Peggy Mihelich and David E. Williams contributed to this report.
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