Is the mortgage problem as bad as the media seems to make it out to be? While delinquencies on mortgages have increased and foreclosures are rising, the fact is that not every homeowner is late with their mortgage payment and not every house will soon be foreclosed upon.
And not every loan is a subprime loan.
I noticed a very illustrative and informative chart from Jerry Bowyer writing on National Review Online regarding the size of the subprime mortgage market. It's much smaller than you might think.
Some highlights:
"Currently there are about 44 million mortgages in the U.S., and less than 14 percent of them are sub-prime. And only about 13 percent of those are late on payments, with the majority of late payers working through their problems with the banks.
So, all in all, when you work through the details and get down to the number that really matters, only about 0.6 percent of U.S. mortgages are currently in foreclosure. That’s up a hair from roughly 0.5 percent last year. That’s it."
Please read the entire article with a very cute Rain Man analogy.