colorado equity home loan rate
The banks in Colorado have concentrated more of their assets in real estate loans and securities during the past five years, leaving them vulnerable if rising interest rates kick the legs out from under the market.
According to a Denver Post analysis of Federal Deposit Insurance Corp. reports, since 2001, Colorado banks have seen their real estate holdings as a percentage of total assets increase from 48.8 percent to 59 percent. U.S. banks have increased their real estate assets as a percentage of total assets from 33.7 percent in 2001 to 40.9 percent today. Foreclosures in Colorado have tripled since 2000, and three out of 10 homeowners have home equity of 5 percent or less, leaving them vulnerable to foreclosure if prices fall, the FDIC reports. Financial experts credit several factors for the surge in bank ownership of real estate assets.
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Foreclosures expected to jump as ARMs reset
NEW YORK - In 2003, Anita Britten refinanced her two-story brick cottage in Lithonia, Ga., using a hybrid adjustable rate mortgage, or ARM. Her lender reassured her that she could refinance out of the riskier loan into a traditional one when her interest rate started to reset.
Three years later, Britten can't get a new mortgage and her monthly payment has jumped by a third in six months. She can't afford her payments and may face foreclosure if her financial situation doesn't change.
As more ARMs adjust upward and housing prices begin to dip, many Americans like Britten can't refinance and are finding themselves trapped in too-high monthly payments. For those who can't make their payments, foreclosure is the only way out.
Foreclosure figures just released by the Mortgage Bankers Association show that foreclosure activity fell in the first quarter of 2006 over the first quarter of 2005 for all loan categories except subprime loans.