The Next Wave Of Foreclosures?

According to LPS Applied Analytics, a mortgage-data research firm, the next wave of foreclosures may be ready to hit Jumbo borrowers. A Jumbo mortgage is one that is over $417,000. Loans in excess of $650,000 are considered Super Jumbo's. Current data, as of late December, states that 6.9% of prime Jumbo loans were at least 90 days late in payment.

Nearly 25% of prime jumbo mortgages exceeded the value of the homes they backed in September. That figure would increase to at least 42% if home prices decline 15% over the next two years.

The bottom line is that the economy is discouraging sales and driving down prices even for properties that normally appeal to affluent buyers.

source: The Wall Street Journal (1/28/09)