U.S. Housing Crisis Worsens As Home Foreclosure, Repossession Rates Zoom

Washington, D.C. (AHN) - The U.S. housing crisis continues to worsen as home foreclosures and repossessions rise to unprecedented levels, while large mortgage insurers reported huge losses.

According to RealtyTrac, bank repossessions jumped 184 percent in July to 77,295, the highest increase since January 2005, while foreclosure notices went up 55 percent to 272,000.

Hardest hit states were Nevada, California and Florida.

Another vital component of the housing industry, the mortgage insurers, logged $2.6 billion losses for 2008. Home owners who purchase houses with less than 20 percent downpayment secure mortgage insurance policies from these firms.

With a large number of subprime borrowers defaulting on their mortgages, the insurance firms had paid since January over $6 billion in claims on foreclosed properties, of which $3.8 billion we made in the second quarter. According to Guy Celaca, publisher of trade journal Inside Mortgage Financing, $1.7 billion of the $2.6 billion losses reported by the large mortgage insurers was incurred during the second quarter.