Real estate bubble continues to burst; Countrywide Financial Corp.

The real estate bubble continues its slow pop as conditions worsen around the country:

Countrywide Financial Corp. said Tuesday its second-quarter profit shrank by nearly a third as softening home prices led to rising delinquencies and mortgage defaults among the most creditworthy borrowers.

Yahoo News

Lenders sent California homeowners the highest number of mortgage default notices in more than a decade during the second quarter, the result of flat or falling prices, anemic sales and a market struggling with the excesses of the 2004-2005 home-buying frenzy, a real estate information service reported.

Inman News

The foreclosure rate on Wisconsin homes remained high throughout the first half of 2007, driven by rising interest rates and the soft housing market, an industry monitor reported Tuesday.
Wisconsin as a whole had 9,229 foreclosure filings in the first half of 2007, up nearly 23 percent compared with 2006, a year in which foreclosures jumped 34 percent, according to newly released data compiled by ForeclosuresWI.com, a provider of Wisconsin foreclosure resources and statistics.
Filings for the month of June 2007 were up more than 8 percent from May.
Milwaukee County foreclosure filings are nearly 48 percent higher compared with the first half of 2006.

Business Journal of Milwaukee

With increasing defaults and foreclosures, banks will tend to dump properties on the market, as they attempt to sell their foreclosed properties. Even a small number of such dumpings will create tremendous downward pressure on prices. Lower prices will make it impossible for owners to sell or refinance "upside down" properties, as the debt on those properties will exceed the market value.
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